If you wanted to test, using a 5% significance level, whether or not a specific slope coefficient is equal to one, then you should A)subtract 1 from the estimated coefficient, divide the difference by the standard error, and check if the resulting ratio is larger than 1.96. B)add and subtract 1.96 from the slope and check if that interval includes 1. C)see if the slope coefficient is between 0.95 and 1.05. D)check if the adjusted R² is close to 1.

Question

Quizplus · Accepted Answer

To test whether a specific slope coefficient is equal to one, we need to calculate the t-statistic by subtracting 1 from the estimated coefficient and dividing the difference by the standard error. We then compare the resulting t-statistic to the critical value at a 5% significance level, which is 1.96 for a two-tailed test. Therefore, option A is the correct choice.

If You Wanted to Test, Using a 5% Significance Level