If You Wanted to Test, Using a 5% Significance Level

question 38

Multiple Choice

If you wanted to test, using a 5% significance level, whether or not a specific slope coefficient is equal to one, then you should

• A)subtract 1 from the estimated coefficient, divide the difference by the standard error, and check if the resulting ratio is larger than 1.96.
• B)add and subtract 1.96 from the slope and check if that interval includes 1.
• C)see if the slope coefficient is between 0.95 and 1.05.
• D)check if the adjusted R² is close to 1.

---

Definitions:

Revenues

Revenues are the total income earned by a company from its normal business activities, before any expenses are deducted.

Expenses

Costs incurred in the process of earning revenue, typically categorized as certain costs necessary to operate a business.

Assets Increase

A rise in the company's resources, resulting from transactions that bring future economic benefits to the entity.

Statement of Cash Flows

A financial statement that provides aggregate data regarding all cash inflows and outflows a company receives from its operational, investing, and financing activities.