A multiple regression model involves 10 independent variables and 30 observations.If we want to test at the 5% significance level whether one of the coefficients is = 0 (vs.≠ 0)the critical value will be:
A)2.228
B)2.093
C)1.729
D)1.697

Question

Quizplus · Accepted Answer

To determine the critical value for this test, we need to use the t-distribution with degrees of freedom (df) equal to n-p-1, where n is the sample size (30) and p is the number of predictors (10). In this case, df = 30-10-1 = 19.

At the 5% significance level and with 19 degrees of freedom, the two-sided critical value is 2.093. Therefore, if the absolute value of the t-statistic for the coefficient in question is greater than 2.093, we can reject the null hypothesis that the coefficient is equal to zero at the 5% significance level.

Note that the critical value would be higher if we were testing the coefficient at a higher significance level or with fewer degrees of freedom.

A Multiple Regression Model Involves 10 Independent Variables and 30