SCENARIO 12-8
It Is Believed That GPA (Grade Point Average

question 53

Multiple Choice

SCENARIO 12-8
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.
Regressing GPA on ACT $$\begin{array}{l}\begin{array} { l r } \hline { \text { Regression Statistics } } \\\hline \text { Multiple R } & 0.7598 \\\text { R Square } & 0.5774 \\\text { Adjusted R Square } & 0.5069 \\\text { Standard Error } & 0.2691 \\\text { Qbservations } & 8 \\\hline\end{array}\\\end{array}$$
ANOVA
$\begin{array}{lrrrcc} \hline & \text { df } & \text { SS } & \text { MS } & \text { F } & \text { Significance.F } \\\hline\text { Regression } & 1 & 0.5940&0.5940&8.1986&0.0286 \\\text { Error } & 6 & 0.4347&0.0724\\\text { Total } & 7 &1.0287\\\hline\end{array}$
$$\begin{array}{l}\begin{array} { l c r r r r r } \hline & \text { Coefficients } & \text { Standard Error } & t \text { Stat } & P \text {-value } & \text { Lower 95\% } & \text { Upper 95\% } \\\hline \text { Intercept } & 0.5681 & 0.9284 & 0.6119 & 0.5630 & - 1.7036 & 2.8398 \\\text { ACT } & 0.1021 & 0.0356 & 2.8633 & 0.0286 & 0.0148 & 0.1895 \\\hline\end{array}\end{array}$$
-Referring to Scenario 12-8, the value of the measured (observed) test statistic of the F-test forH0 : $\beta$ 1 = 0 vs.H1 : $\beta$ 1 $\neq$ 0

• A)may be negative.
• B)is always positive.
• C)is always negative.
• D)has the same sign as the corresponding t test statistic.

---

Definitions:

Demand Curve

A graph representing the relationship between the price of a good and the quantity demanded, with price on the vertical axis and quantity on the horizontal axis.

Loanable Funds

The money available for borrowing in the financial markets, determined by savings and investments.

Savers

Individuals or entities that set aside a portion of current income for future use, often by depositing money in savings accounts or investing in securities.

Inflation Rate

The speed at which the overall price level of goods and services increases, leading to a decrease in purchasing power.