Explanation:
The test statistic for the slope coefficient is calculated as:
The degrees of freedom for a simple linear regression are . At a 5% level of significance for a two-tailed test, the critical t-value is approximately 2.306. Since the calculated test statistic (8.2177) is greater than the critical value (2.306), we reject the null hypothesis .
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Q.77 The estimated slope coefficient (β₁) for a certain stock is 0.6566, with a standard error equal to 0.0799. The sample had 10 observations, and a researcher wants to know if the slope coefficient is statistically different than zero. Using a 5% level of significance, what are the test statistic and the decision rule?
A
0.1217; do not reject H₀
B
8.2177; do not reject H₀
C
0.1217; reject H₀
D
8.2177; reject H₀
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