Reading 11- LOS G : Q3 against, class

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3.Consider the regression results from the regression of Y against X for 50 observations:

Y = 0.78 + 1.2 X
The standard error of the estimate is 0.40 and the standard error of the coefficient is 0.45.

Which of the following reports the correct value of the t-statistic for the slope and correctly evaluates its statistical significance with 95 percent confidence?

A)   t = 3.000; slope is significantly different from zero.

B)   t = 1.789; slope is not significantly different from zero.

C)   t = 2.667; slope is significantly different from zero.

D)   t = 1.200; slope not significantly different from zero.

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The correct answer was C)

The test statistic is t = (1.2 – 0) / 0.45 = 2.667. The critical t-values for 48 degrees of freedom are ± 2.011. Therefore, the slope is different from zero.