Exhibit 17

question 60

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.What is the p-value for testing the significance of Time in Model B?

• A)Less than 0.10
• B)Less than 0.20 but at least 0.10
• C)Less than 0.40 but at least 0.20
• D)More than 0.40

---

Definitions:

Contra Asset

An asset account where the account balance is a negative amount that reduces the total value of assets on the balance sheet.

Accrued Expenses

Expenses that have been incurred but not yet paid or recorded, representing liabilities for a business.

Liabilities

Liabilities represent financial obligations or debts that a company owes to external parties, such as loans and accounts payable.

Fixed Assets

Tangible assets, such as buildings, machinery, and equipment, used in the operations of a business that are not intended for sale.