Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Multicollinearity
As the degree of correlation between the independent variables increases, the regression coefficients become less reliable. That is, although the independent variables may together explain the dependent variable, but because of multicollinearity the coefficients of the explanatory variables may be rejected. It can happen that the model may be accepted (through ANOVA and the F test), but the individual coefficients may be rejected (through the t test). This is because the interplay among the independent variables reduces the influence of the individual variables in the model. In the extreme case, if two variables are identical, then the influence of each one in the model would be reduced. Multicollinearity does not reduce the accuracy of the model (the predictive powers), but it hurts any sensitivity analysis - if we increase one explanatory variable by one unit, what happens?
This is a subject in itself, but the reader should be aware of the importance of multicollinearity.
Multiple Correlation Coefficients
So far we have come across correlation coefficients between two variables X and Y. However in the case of a multiple regression equation like
Y = a + b1 X1 + b2 X2
we see that Y can be correlated to both X1 and X2. Hence we can have a coefficient of multiple correlation which will measure the correlation between Y and both X1 and X2.
Illustrate the term structure of interest rates? The term structure of interest rates: The term to maturity affects the interest rate. Bonds along with identical risk may
Investors, who do not believe in Efficient Market Hypothesis (EMH), adopt active management strategies. Such investors incur more search costs (with regard to tim
A debt obligation that is issued and traded both in the US bond market and the Eurobond market is referred to as global bond. For an entity to issue global bonds,
Inflation and Exchange Rates To understand the impact of inflation, several terms should be understood. For example, inflation from the investors' standpoint must be clearly de
Role of Financial Intermediaries in the financial system: Having designed the instrument, the issuer should then ensure that these financial assets reach the ultimate investor
We defined the conversion premium as the difference between the market price of the convertible and the conversion value. The conversion premium ratio tells us ab
Optimal Portfolio Selection: The next step involves selecting the optimal portfolio. The strategic asset allocation will have overriding importance in pension fund management.
Like corporate bonds, non-corporate bonds such as asset-backed securities, mortgage-backed securities, municipal bonds, sovereign bonds are also exposed to credit
Put This is an agreement which is allowing a holder of privacies to sell them back to the issuer at a specified amount during a specified time interval. This technique protects
Q. Disadvantage or redundancy of excessive working capital? Excessive working capital means idle funds which earns no profit for the business operation it should have nighters
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd