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.
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.