Question: Question 2: The manager in Question 1 now collects a new sample of monthly data on advertising expenditure (X) and sales (Y) for a rival

Question 2: The manager in Question 1 now collects a new sample of monthly data on advertising expenditure (X) and sales (Y) for a rival company, over the same 48 month period. She estimates the following model for this data: = 8.35 + 1.42 +

The standard errors of 0 and 1 are 3.39 and 0.432 respectively. The manager believes that there is no relationship between advertising expenditure and sales.

3- Describe how you to test this claim at a 5% level of significance, against a two-sided alternative. Specify all the assumptions you make and comments all the steps.

Please explain your working out in as much detail as possible for both questions please.

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