Question

Multicollinearity causes 

A low R-squares Correct Answer Incorrect Answer
B biased coefficient estimates Correct Answer Incorrect Answer
C inconsistent coefficient estimates Correct Answer Incorrect Answer
D Significant t ratios Correct Answer Incorrect Answer
E none of these Correct Answer Incorrect Answer

Solution

All the options are not the result of Multicollinearity. In presence of multicollinearity, variance gets inflated and t ratios are insignificant but R^2 is high.

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