## FRM-Regression analysis

anbu.edu
Finance Junkie
Posts: 205
Joined: Mon Feb 04, 2013 3:35 pm

### FRM-Regression analysis

A dependent variable is regressed against three independent variables across 25 observations. The regression sum of squares is 119.25, and the total sum of squares is 294.45. The following are the estimated coefficient values and standard errors of the coefficients.

Coefficient

Value

Standard error

1

2.43

1.4200

2

3.21

1.5500

3

0.18

0.0818

What is the p-value for the test of the hypothesis that all three of the coefficients are equal to zero?

A) lower than 0.025.
B) Between 0.025 and 0.05.
C) Between 0.05 and 0.10.
D) Greater than 0.10.

Source schweser

i dont know how to answer this question. Can anybody please solve this

vnraghuveer
Good Student
Posts: 20
Joined: Mon Apr 08, 2013 1:36 pm

### FRM-Regression analysis

Hi anbu,

The t-stat values for the three coefficients are calculated by using the formula
t-stat= (coefficient-0)/Std error.
So the t-stat values are 1.71, 2.07 and 2.2 respectively which correspond to p-values of 0.05, 0.03 and 0.025 respectively.(Look at t-distribution table with 23 degrees of freedom).
So the p values lie between 0.025 and 0.05 Option B