The Ftest is used to determine if a a regression equation si

The F-test is used to determine if

a) a regression equation significantly accounts for the variation in the value of a dependent variable.

b) a regression coefficient is significant.

c) multicollinearity exists.

d) an identification problem is present.

Solution

Answer:

Option C (when multicollinearity exist) is correct

Multicollinearity is a situation when in a multiple regression model two or more explanatory variables are extremely linearly related to each other. We use F-test to detect whether there is multicollinearity exist in the multiple regression model or not.