Question

# True or False. Explain your answer: d) Least squares estimates of the regression coefficients b0, b1,...

True or False. Explain your answer:

d) Least squares estimates of the regression coefficients b0, b1, . . . bn are chosen to maximize R2 .

e) If all the explanatory variables are uncorrelated, the variance inflation factor (VIF) for each explanatory variable will be 1.

) b0 and b1 from a simple linear regression model are independent.

#### Homework Answers

Answer #1

d) False, the least square estimates of the regression coefficients are not chosen, they are calculated from the provided data. The value of R2 depends on the variance of the residuals and the sample variance in the independent variables.

e) True, because when the explanatory variables are not correlated to each other then the variation inflation factor for each variable will be equal to 1. Variation inflation factor measures multicollinearity hence a zero value of correlation will have VIF equal to 1.

f) False, because b0 is calculated using b1.

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