You are hired as an Research Assistant by an Econ professor. The professor wants

Question

You are hired as an Research Assistant by an Econ professor. The professor wants to test the assumption that the population mean is zero at the 5% level, and asked you to compute the t-statistic, the P-value, and the 95% confidence interval. You showed the following results: t-statistic-1.84, P-value = 0.066, CI = [-0.0170,-0.0006]. The professor took a glance at them and said that at least one of them should be wrong. How could the professor tell that? Suppose only one of the three is wrong. Which one is wrong? (Assume that all the information the professor had was the three numbers you showed. i.e., You are the only RA for him and the professor was too busy to compute the numbers by themselves.) (2)

Explanation / Answer

T-statistics = -1.84 this is correct as we know T-score can have negative value

P-value= 0.066 we know this is also possibe as Z-score for -1.96 is 0.025 and thie p-value is is near to our general p-value.

CI is [-0.0170, -0006] as it is mentioned in question population mean is Zero so in this confidence interval upper limit should be positive it cant be negative so this is wrong.

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