SCENARIO 14-17
Given Below Are Results from the Regression Analysis

question 202

Short Answer

SCENARIO 14-17
Given below are results from the regression analysis where the dependent variable is the number of
weeks a worker is unemployed due to a layoff (Unemploy) and the independent variables are the age
of the worker (Age) and a dummy variable for management position (Manager: 1 = yes, 0 = no).
The results of the regression analysis are given below: $\begin{array}{l}\hline \ { \text { Regression Statistics } } \\\hline \text { Multiple R } & 0.6391 \\\text { R Square } & 0.4085 \\\text { Adjusted R Square } & 0.3765 \\\text { Standard Error } & 18.8929 \\\text { Observations } & 40 \\\hline\end{array}$

$\text { ANOVA }$



$\begin{array} { l r r r r } \hline & \text { Coefficients } & \text { Standard Error } & { t \text { Stat } } & { \text { P-value } } \\\hline \text { Intercept } & - 0.2143 & 11.5796 & - 0.0185 & 0.9853 \\\text { Age } & 1.4448 & 0.3160 & 4.5717 & 0.0000 \\\text { Manager } & - 22.5761 & 11.3488 & - 1.9893 & 0.0541 \\\hline\end{array}$
-Referring to Scenario 14-17, which of the following is the correct null hypothesis to test whether age has any effect on the number of weeks a worker is unemployed due to a layoff while
Holding constant the effect of the other independent variable? a) $H _ { 1 } : \beta _ { 1 } = 0$
b) $H _ { 1 } : \beta _ { 1 } \neq 0$
c) $H _ { 1 } : \beta _ { 2 } = 0$
d) $H _ { 1 } : \beta _ { 2 } \neq 0$

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Definitions:

Term Structure

The relationship between interest rates (or bond yields) and different terms (or maturities), typically depicted in a yield curve.

Expectations Theory

A theory suggesting that long-term interest rates reflect the market's expectation for future short-term rates.

Liquidity Preference Theory

Theory that investors demand a risk premium on long-term bonds. Implies that the forward rate generally will exceed the expected future interest rate.

Treasury Bond

A Treasury bond is a long-term, fixed-interest government debt security with a maturity of 20 to 30 years and pays interest every six months.