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ProblemSet6

# ProblemSet6 - Professor Mumford [email protected] Econ 360...

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Professor Mumford Econ 360 - Fall 2010 [email protected] Problem Set 6 Due at the beginning of class on Tuesday, October 19 Multiple Choice Questions (16 points) Suppose you regressed the grade point averages ( GPA ) of 100 college students on their hours of study per week ( study ) and ACT score ( ACT ). You are interested in which of these two variables is relatively more important in determining GPA, and since hours studied per week and ACT are measured in different units, you decide to estimate the model with standardized variables to get beta coefficients (also called standardized coefficients). The results of the estimation are as follows: beta standard Variable coefficient error P -value study 0.20 0.10 0.05 ACT 0.10 0.05 0.05 R 2 = 0 . 90 SSR = 35 1. (4 points) What is the t -statistic for the ACT coefficient, assuming a null hypothesis that ACT has no effect on GPA . (a) 0.2 (b) 0.5 (c) 2 (d) 5 2. (4 points) What is the interpretation of the P -value for the study coefficient. 1

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