Use the following estimated regression equation to answer the questions below. T

Question

Use the following estimated regression equation to answer the questions below. The estimated standard error for each coefficient is listed below that coefficient in parenthesis (i.e. the estimated standard error for b1 is sb1= 1.80). The equation was estimated using a sample of 25 observations.

(a) For each slope coefficient, calculate the 95% confdence interval.

(b) Test each estimated slope coefficient for signifcance at the 5% significance level. Be sure to report you rejection rule, test statistic, and conclusion. What is your null hypothesis? Your alternative hypothesis? What does it mean to reject the null and what does it mean to fail to reject the null?

Explanation / Answer

2.19 +/-2.074 * 1.80 (-1.543, 5.923)

-3.58 +/- 2.074 *1.42= ( -6,525,-0.63)

Rejection rule: If zero is in confidence interval do not reject the null hypothesis that the coefficient is equal to zero. If zero is not in the confidence interval then reject.

So do not reject in the first, reject in the second.

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