# Quantitative Methods - Hamilton Q3

Hi guys I am new to this forum. I can’t seem to understand the t calculation below. Why is the test statistic not the t-value given in Exhibit 1? Thanks a million!

Based on the results in Exhibit 1, the value of the test statistic relating to Hamilton’s null hypothesis about the value of the coefficient on SPREAD is closest to:

4.28. 0.24. 0.11.

Incorrect.

The null hypothesis is H0: bspread = 1.

The calculated value of the t-statistic is t = (1.0264 – 1.0)/standard error.

The standard error is 1.0264/4.28 = 0.24.

The calculated value for t = (1.0264 – 1.0)/0.24 = 0.11.

Hi,

The exhibit is calulcating the T stat as if your hypothesized value is 0. So Coefficent - 0 / S.E

In the text below, they want to now compute the T-stat against a hypothesized value of 1. So, Coefficient - 1 / S.E = 0.11

Keep an eye out in item sets to see what hte hypothesised value is. In most cases its 0. So we just take coefficient / S.E

but this is not always the case as this item set shows.

Thanks a lot for clarifying! I made the mistake to assume the t-stat in Exhibit 1 was implying the hypothesized value is 1.