In a study of the influence of financial institutions on bond interest rates in Germany, quarterly data over a period of 12 years were analyzed. The postulated model was
y = β0 + β1x1 + β2x2 + ε
where
y = change over the quarter in the bond interest rates
x1 = change over the quarter in bond purchases by financial institutions
x2 = change over the quarter in bond sales by financial institutions
The estimated partial regression coefficients were as follows:
b1 = 0.057 b2 = -0.065
The corrected coefficient of determination was found to be R2 = 0.463. Test the null hypothesis:
H0: β1 = β2 = 0