# 1 tail vs. 2 tail

ok silly question but i don’t understand why we determine the critical t value from the confidence interval assuming its one tailed… I thought we always use two tail when looking up critical t-values…!?! Consider the following estimated regression equation: ROEt = 0.23 - 1.50 CEt The standard error of the coefficient is 0.40 and the number of observations is 32. The 95 percent confidence interval for the slope coefficient, b1, is: A) {0.683 < b1 < 2.317}. B) {-2.300 < b1 < -0.700}. C) {-2.317 < b1 < -0.683}. D) {-3.542 < b1 < 0.542}.

The 5% one tail test will give you the same as the 2.5% two tail test.

ans would be C i suck at quant

Niblita isn’t it the other way around? a 2.5 one test has same number as 5% two tailed test?

-1.5 +/- 2.042(.4) Yea, I tried to do it off memory. It’s much easier looking at the table.

two tailed 2.5 is equivalent to one tailed 5 percent, because you are looking for the equivalent of 95 percent. in the two tailed, each tail has 2.5 percent of the total 5 percent outside of the confidence interval. In the one tailed, only one side, so it takes the entire 5 percent

At least I knew that one number will be the same as the other . . .

-1.5 + 2.042 *0.4 -1.5 - 2.042 *0.4 C Did I just login to the L1 forum?

always good to have some refreshers sundrani !!!

agree Usif, was in bad mood since I was at work.