(Requires Appendix Material from Chapters 4 and 5)Shortly Before You

question 43

Essay

(Requires Appendix material from Chapters 4 and 5)Shortly before you are making a group presentation on the testscore/student-teacher ratio results,you realize that one of your peers forgot to type all the relevant information on one of your slides.Here is what you see: = 698.9 - STR,R2 = 0.051,SER = 18.6
(9.47)(0.48)
In addition,your group member explains that he ran the regression in a standard spreadsheet program,and that,as a result,the standard errors in parenthesis are homoskedasticity-only standard errors.
(a)Find the value for the slope coefficient.
(b)Calculate the t-statistic for the slope and the intercept.Test the hypothesis that the intercept and the slope are different from zero.
(c)Should you be concerned that your group member only gave you the result for the homoskedasticity-only standard error formula,instead of using the heteroskedasticity-robust standard errors?

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