Question

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

Answer 1

If you wanted to​ test, using a​ 5% significance​ level, whether or not a specific slope coefficient is equal to​ one, then you should subtract 1 from the estimated​ coefficient, divide the difference by the standard​ error, and check if the resulting ratio is larger than 1.96 .

Option B is the correct answer.

Explanation:

If you wanted to​ test, using a​ 5% significance​ level, whether or not a specific slope coefficient is equal to​ one, then you should subtract 1 from the estimated​ coefficient, divide the difference by the standard​ error, and check if the resulting ratio is larger than 1.96.

Option B is correct because after subtracting it from 1, it will become a standardized test if the slope is equal to 0 or not.