In order to examine the relationship between the selling price of a used car and its age, an analyst uses data from 20 recent transactions and estimates Price = β0 + β1Age + . A portion of the regression results is shown in the accompanying table.

a. Specify the competing hypotheses in order to determine whether the selling price of a used car and its age are linearly related.
b. Calculate the value of the test statistic.
c. At the 5% significance level, what is the conclusion to the test? Is the age of a used car significant in explaining its selling price?
d. Conduct a hypothesis test at the 5% significance level in order to determine if β1 differs from 21000. Show all of the relevantsteps.

  • CreatedJanuary 28, 2015
  • Files Included
Post your question