Page 14 - FINAL CFA II SLIDES JUNE 2019 DAY 2
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MODULE 7.3: HYPOTHESIS TESTS AND CONFIDENCE INTERVALS
LOS 7.g: Formulate a null and alternative hypothesis about a population value of a regression coefficient and
determine the appropriate test statistic and whether the null hypothesis is rejected at a given level of significance.
A t-test may also be used to test the hypothesis that the true slope coefficient, b , is equal to some hypothesized value.
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To test whether an independent variable explains the variation in the dependent variable (i.e., it is statistically significant), we test
whether the slope is zero (b = 0). The appropriate test structure is:
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