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# Objective - Testing of hypothesis

1. In hypothesis testing, the level of significance is?
2. When would you use a t test and when would you use an f test ?
a. What is the independent variable ?
b. What is the dependent variable ?
c. What are the null and alternate hypotheses ?
d. With a significance level of .05 and a p-value of .0467 what would be your decision ?
4. What information does correlation provide ?
5. What is the difference between a positive and a negative correlation?
6. As the relationship deteriorates from a perfect correlation, what happens to the points on a scatter diagram ?
7. As CEO of a large corporation, you are interested in the relationship of funds expended in research and corporate profit. The results are: p = .0013 and r = .91
a. What is the independent and dependent variable?
b. What are the null and alternate hypotheses ?
c. What is your decision ?
d. What percent of the variance in profit is accounted for by the variation spent on research?
e. What percent of the variance in profit is not accounted for by the variation spent on research?

#### Solution Preview

1. Area of critical region, the region of rejection

2. F- test is used to check if the relationship is linear or not
t-test is used to check if the relationship between variables is positive or negative

3.