# Confidence Level and T value

Alpha 0.0031 ( coefficients) ;  0.0070 ( standard of error) ;  0.4429 (t statistic)
Beta 0.9068 ( coefficients) ; 0.1170 ( standard of error) ;  7.7504 ( t statistic)

1 . Test the null hypothesis, H0, that β for RBC equals 1 (β = 1) against the
alternative hypothesis that β does not equal 1 (β ≠ 1) using the confidence
interval approach.

Solution to 1:
The estimated β  from the regression is 0.9068. The estimated standard error for that coefficient in the regression, s
β is 0.1170. The regression equation has 58 degrees of freedom (60 − 2), so the critical value for the test statistic is approximately tc = 2.00 at the 0.05 significance level. Therefore, the 95 percent confidence interval for the data for any hypothesized value of β is shown by the range.

0.9068 ± 2.00(0.1170)

I got the above, but I didn’t understand how they got 2 if they weren’t given the confidence level

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They blew it.  You need a confidence level or an α.

Simplify the complicated side; don't complify the simplicated side.

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They really should tell you an alpha or confidence level; they assumed .05 for alpha and .95 for the confidence coefficient, so they just were unclear.

ok so im not going crazy

Did it ever happen that they never have given us the confidence level and we had to assume its 5%?

Onda wrote:
ok so im not going crazy

There’s not enough evidence to conclude that.

Onda wrote:
Did it ever happen that they never have given us the confidence level and we had to assume its 5%?

No.

Simplify the complicated side; don't complify the simplicated side.

Financial Exam Help 123: The place to get help for the CFA® exams
http://financialexamhelp123.com/

thanks :)

you are so funny with your ” there is not enough evidence to conclude that” hahaha