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 preceding statements is correct.

Question

Quizplus · Accepted Answer

The absolute value of the t-statistic represents the number of standard errors the coefficient estimate is away from zero. A t-statistic greater than or equal to 2 suggests that the estimate is at least two standard errors away from zero, which corresponds to a confidence level of 95% or higher. Therefore, choice C is the best option.

As a General Rule of Thumb,a Manager Can Be 95