Exhibit 17

question 111

Multiple Choice

Exhibit 17.4.A researcher wants to examine how the remaining balance on $100,000 loans taken 10-20 years ago depends on whether the loan was a prime or sub-prime loan.He collected a sample of 25 prime loans and 25 sub-prime loans and records the data in the following variables: Balance = the remaining amount of loan to be paid off (in dollars) ,
Time = the time elapsed from taking the loan,
Prime = a dummy variable assuming 1 for prime loans,and 0 for sub-prime loans.
The regression results obtained for the models:
Model A: Balance = β₀ + β₁Prime + ε
Model B: Balance = β₀ + β₁Time + β₂Prime + β₃Time × Prime + ε
Model C: Balance = β₀ + β₁Prime + β₂Time × Prime + ε,
Are summarized below. Note.The values of relevant test statistics are shown in parentheses below the estimated coefficients.
Refer to Exhibit 17.4.Using Model B,what is the alternative hypothesis for testing the significance of Time?

• A)H_A: β₁ = 0
• B)H_A: β₁ = 0 and β₃ = 0
• C)H_A: β₁ ≠ 0
• D)H_A: β₁ ≠ 0 or β₃ ≠ 0

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Definitions:

Cheque Clearance Policy

The set of rules and procedures that govern the process through which a cheque goes from being presented to a bank to the funds being made available in the recipient's account.

Behaviourally Anchored Rating Scales

A performance appraisal method that uses specific examples of behavior to rate employee performance against a scale.

Termination

The process of ending an employment relationship between an employer and an employee.

Mismatch

A situation where there is a lack of alignment or compatibility between two or more elements.