Suppose that an equity analyst at a prestigious investment bank vants to determi

Question

Suppose that an equity analyst at a prestigious investment bank vants to determine the relationship between a corporation's sales (in million dollars) and the price of the corporation's stock (in dollars). She assumes that stock prices are the dependent variable in this relationship, while sales are the independent variable. From the monthly observations for the past 5 years, the following results are obtained. Consider the following one Hailed hypothesis testing. H_0: beta_1 = 3 H_1 = beta > 3 Find the p-value and determine irthe null hypothesis is rejected at 10%. (Use the standard normal approximation.) The p-value is 5.480%. The null hypothesis is rejected. The p-value is 0.000%. The null hypothesis is NOT rejected. The p-value is 5.490%. The null hypolhesis is NOT rejected. The p-value is 10.960%. The null hypothesis is NOT rejected. The p-value is 0.000%. The null hypothesis is rejected. The p-value is 10.960%. The n hypothesis is rejected.

Explanation / Answer

here test stat t=(X-mean)/std error =(4.12-3)/0.7 =1.6

here for (n-2=58) degree of freedom and above test stat p value =0.0548

hence option a is correct. the p value is 5.48% . the null hypothesis is rejected

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