THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

question 117

Multiple Choice

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
A loan officer is interested in examining the determinants of the total dollar value of residential loans made during a month.The officer used Y = β₀ + β₁X₁ + β₂X₂ + β₃X₃ + ε to model the relationship,where Y is the total dollar value of residential loans in a month (in millions of dollars) ,X₁ is the number of loans,X₂ is the interest rate,and X₃ is the dollar value of expenditures of the bank on advertising (in thousands of dollars) .Using data from the past 24 months,she obtained the following results:
= 5.7 + 0.189x₁ - 1.3x₂ + 0.08x₃,
= 3.2,
= 0.03,
= 0.062,
= 0.17,R² = 0.46,and adjusted
= 0.41.
-What should the null and alternative hypotheses be for β₁?

• A)H₀ : β₁ = 0, H₁ : β₁ > 0
• B)H₀ : β₁ = 0,H₁ : β₁ < 0
• C)H₀ : β₁ ≠ 0,H₁ : β₁ = 0
• D)H₀ : β₁ > 0, H₁ : β₁ < 0

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Definitions:

Financial Losses

Refers to the situation in which a business's expenses exceed its revenues, resulting in a negative profit.