A Marketing Analyst Wants to Examine the Relationship Between Sales

question 122

Multiple Choice

A marketing analyst wants to examine the relationship between sales (in $1,000s) and advertising (in $100s) for firms in the food and beverage industry and so collects monthly data for 25 firms.He estimates the model: Sales = β₀ + β₁ Advertising + ε.The following table shows a portion of the regression results. When testing whether the slope coefficient differs from 3,the critical values at the 5% significance level are −2.069 and 2.069.The conclusion to the test is to _______________________________________________.

• A) reject H₀;the slope coefficient differs from 3
• B) not reject H₀;the slope coefficient differs from 3
• C) reject H₀;the slope coefficient does not differ from 3
• D) not reject H₀;the slope coefficient does not differ from 3

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Definitions:

Acid-Test Ratio

A stringent indicator of a company's liquidity, calculating if it can meet its short-term obligations with its most liquid assets, excluding inventory.

Accounts Receivable

Accounts Receivable is the money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Accounts Payable

Liabilities or money owed by a business to its suppliers or creditors for goods or services received.

Price-Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings.