Question: Question 6 [Total Marks: 9] Answer the following questions briefly: a) Define the term muticollinearity and explain what effect it can have on multiple regression

Question 6 [Total Marks: 9] Answer the following questions briefly:

a) Define the term muticollinearity and explain what effect it can have on multiple regression analysis. How do we detect its presence? [ 3 marks]

b) Explain which of the following intervals based on the same estimated equations with the fixed values of the explanatory variables would be wider:

i) A 98%prediction interval for an individual value of Y

or ii) A 98% confidence interval for a mean value of Y? [ 3 marks]

c) Examine the statement, "In multiple regression models, we always use adjusted to choose the best performing model". Explain whether you agree or disagree with this statement.

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