It may be a concern that market value and assets are highly correlated and hence there may be a problem with including them both as explanatory variables. The following set of output is for the regression that excludes assets from the regression above. Based on this set of output, does it seem likely that assets and market value are highly correlated, and hence does it appear that multicollinearity is a problem? Explain how you know.
It may be a concern that market value and assets are highly correlated and hence there may be a problem with including them both as explanatory variables. The following set of output is for the regression that excludes assets from the regression above. Based on this set of output, does it seem likely that assets and market value are highly correlated, and hence does it appear that multicollinearity is a problem? Explain how you know.
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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It may be a concern that market value and assets are highly correlated and hence there may be a problem with including them both as explanatory variables. The following set of output is for the regression that excludes assets from the regression above. Based on this set of output, does it seem likely that assets and market value are highly correlated, and hence does it appear that multicollinearity is a problem? Explain how you know.
Transcribed Image Text:Regression
Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.490
0.240
0.236
3981
1000
ANOVA
df
SS
MS
Significance F
Regression
Residual
4963901656 992780331
62.7
7.34E-57
994
15751087364 15846164
Total
999
20714989020
Coefficients Standard Error
t Stat
P-value
Lower 95% Upper 95%
Intercept
CEOANN
-5390.1
568.5
-9.48
1.80E-20
-6505.8
-4274.4
2259.2
328.1
6.88
1.03E-11
1615.2
2903.1
EMPL
17.3
3.7
4.62
4.26E-06
9.9
24.6
MKTVAL
944.8
30.1
31.39
3.89E-30
885.8
1003.8
EPSIN
-171.8
49.4
-3.48
0.00052
-268.7
-74.9
YEAR DUM
401.0
253.1
1.58
0.113
-95.6
897.6
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