# Calculating T-statistic and Coefficient of Correlation

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a) Given the equation: (See attached), what is the calculated t-statistic and is it significant at the 5 percent level? (Hint: Apply 2 rules)

b) Calculate the coefficient of correlation from the information in (a). Write the H_o and H_a. Then, make a decision about the significance of the coefficient of correlation.

c) What is the (see attached) in (a)? If SST = 20 in (a), what is the value of SSE and SSR?

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#### Solution Preview

a)

Ans: r^2 = 0.96, so r=sqrt(0.96) =0.98. So t-statistic=0.98*sqrt((10-2)/(1-0.96)) ...

#### Solution Summary

The solutions gives detailed steps on calculating t-statistic, coefficient of correlation using given data and determining sum of residual, sum of error if sum of total is known. All formula and calculations are shown and explained.

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