TABLE 13-8 It Is Believed That GPA (Grade Point Average, Based on Based

question 164

Multiple Choice

TABLE 13-8
It is believed that GPA (grade point average, based on a four point scale) should have a positive linear relationship with ACT scores. Given below is the Excel output for predicting GPA using ACT scores based a data set of 8 randomly chosen students from a Big-Ten university.

-Referring to Table 13-8, what are the decision and conclusion on testing whether there is any linear relationship at 1% level of significance between GPA and ACT scores?

• A) Do not reject the null hypothesis; hence there is insufficient evidence to show that ACT scores and GPA are linearly related.
• B) Reject the null hypothesis; hence there is insufficient evidence to show that ACT scores and GPA are linearly related.
• C) Do not reject the null hypothesis; hence there is sufficient evidence to show that ACT scores and GPA are linearly related.
• D) Reject the null hypothesis; hence there is sufficient evidence to show that ACT scores and GPA are linearly related.

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Definitions:

Sustainable Growth Rate

The maximum rate at which a company can grow its sales, earnings, and dividends without increasing its leverage or equity.

Dividend Payout Ratio

The fraction of net earnings a firm pays out to its shareholders in dividends, indicating how much money a company returns to shareholders versus reinvesting.

Financial Statement

An official documentation detailing the fiscal transactions and status of a company, individual, or another entity.

Retention Ratio

The portion of net income that is retained by a corporation rather than distributed to its shareholders as dividends.