Question: Let us consider a multiple linear regression equation of the type: i 0 1 1i 2 2i 3 3i i y = ???? +????X +????

Let us consider a multiple linear regression equation of the type:

i 0 1 1i 2 2i 3 3i i y = ???? +????X +???? X +???? X +????

How will you apply the principal component procedure to estimate the parameters if there exists a multicollinearity problem?

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