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Basic Question 0 of 13
True or False? If False, correct the statement.
Suppose you are performing a simple linear regression of Y on X and you test the hypothesis that the slope (β) is zero against a two-sided alternative. You have n = 25 observations and your computed test (t) statistic is 2.6. Then your P-value is given by .01 < P < .02, which gives borderline significance (i.e., you would reject H(0) at α = .02 but fail to reject H(0) at α = .01).
User Contributed Comments 11
| User | Comment |
|---|---|
| woojacky | GOOD |
| Flora0406 | I can't get this one. |
| bmeisner | You need a t table for this to check the p values. It will show you what the answer tells you that t(23, alpha=.02)=+-2.5 and that t(23, .01)=+-2.8. Does anyone remember if we have to memorize the t-values or is that given on the test? |
| xiajessy | yeah, we have to remember t VALUE |
| xiajessy | I mean certain critical t value like at 10% , 5%, 1% significance level, the rest will be provided via a table |
| Nightsurfer | Guys, we won't have to memorize t-values. If this were the normal distribution, perhaps. But t-value is a function of d.f. and confidence. WAY too hard to memorize! |
| Cesarnew | We do not need to memorize any t-values for this question. Just to understand and to interpret the P-value.All the relevant info is given. |
| cfaajay | Guys when P value is given,use that for determining if null hypothesis will be rejected or not..When p-value is less then the level of significance ,reject the null hypothesis for that level of significance as is the case here P value is less then level of significance (0.2) ,so reject null . |
| quanttrader | reject at 0.02 since t > t(critical) fail to reject at 0.01 since t< t(critical) |
| quanttrader | alpha at 0.01 implies a more conservative approach -- ie CL is 99%, and thus it will be harder to reject the null |
| jpowers | Remember this is a two-tailed test. |
I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
interpret and evaluate measures of skewness and kurtosis to address an investment problem
CFA® 2025 Level I Curriculum, Volume 1, Module 3.