How to do this MC?

  1. The p-value of the slope in a simple regression is 0.45. Then
    A. H0: β1 = 0 should be accepted.
    B. the data suggests that the predictor x is not helpful in predicting the response y.
    C. the slope is less than 1 SE from zero.
    D. all the above are correct.

1 Answer
Dec 13, 2017

Since p-value is so large, this could easily occur by chance, i.e, this slope is not significant. Equivalently, we fail to reject null hypothesis.

Therefore, Option (A) is correct.

Option (B) is also correct, because slope is not significant (i.e, slope is not significantly different from zero and we can remove it from the model).

Option (C) can be taken as correct if sample size of regression is atleast 4, i.e, degrees of freedom is atleast n-2 = 2. Now, using excel code T.INV(1-(0.45)/2, 2), we get 0.931, which is less than 1. What this means is that the t-ratio must be less than 1, i.e, option (C) is correct.

D. all the above are correct.