Page 4 - FINAL CFA II SLIDES JUNE 2019 DAY 3
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LOS 8.c: Formulate an Ho and Ha about the population value of a READING 8: MULTIPLE REGRESSION AND ISSUES IN REGRESSION ANALYSIS
regression coefficient, calculate the value of the test statistic, and
determine whether to reject Ho at a given SL.
LOS 8.d: Interpret the results of hypothesis tests of regression MODULE 8.2: HYPOTHESIS TESTS AND CONFIDENCE INTERVALS
coefficients.
Hypothesis Testing of Regression Coefficients
Do PR OR YCS make a significant contribution to explaining the variation EG10?
n = 46 observations!
The 10% 2TT critical t-value with 46 -2 - 1 = 43df is 1.68
t-statistic (7.8) > the upper critical t-value (1.68)
So?
Decision rule: Reject Ho if -1.68 > t > 1.68 Meaning/interpretation?
Reject Ho, and? Conclude that the PR regression coefficient is statistically-speaking, significantly different
from zero at the 10% significance level.
Could do same for YCS but what if we had AND, not OR?
That’s for F but lets clear up p-value!
