As a general rule of thumb, a manager can be 95 percent confident that the true value of the underlying parameter in the regression is not zero, when the absolute value of the t-statistic is:
A) greater than zero.
B) greater than or equal to 1.
C) greater than or equal to 2.
D) None of the statements is correct.

Question

Quizplus · Accepted Answer

This statement refers to the significance level of the t-statistic. As a general rule of thumb, a researcher or manager usually considers a t-statistic of 2.0 or higher as significant, meaning there is a 95% probability that the coefficient is not zero. Therefore, the correct answer is C, i.e., greater than or equal to 2.

As a General Rule of Thumb, a Manager Can Be