Page 14 - FINAL CFA II SLIDES JUNE 2019 DAY 2
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MODULE 7.3: HYPOTHESIS TESTS AND CONFIDENCE INTERVALS
Does not include zero, hence:
Reject Ho! : Slope coefficient is significantly different from zero!
Meaning? 95% sure, it is steep slope! Only 5% chance it is not!
LOS 7.g: Formulate a Ho and Ha about a population value of a regression coefficient and determine the appropriate
test statistic and whether Ho is rejected at a given SL.
A t-test is used to test whether a slope coefficient, b , is equal to some hypothesized value (df = n - 2).
1
Rejection of Ho means the slope coefficient is
different from the hypothesis value b1
