years Xi
bonus Yi
XiYi
Xi2
4
5.7
22.8
16
2
3.5
7
7.4
10.1
74.74
54.76
5
9
45
25
2.7
5.4
12
144
Question 25 Are years of service and annual bonuses related? The annual bonuses of 6 randomly selected employees (measured in “thousands of dollars”) along their their respective years of service for the company. Suppose we estimate a linear regression using the Ordinary Least Squares technique of the form:
Bonusi = b0 + b1(yearsi)
where the subscript i indicates the ith employee
Using your excel output from this regression, what is the correct decision using the p value method for the slope test (assume an alpha level of .05)
H0: B1 = 0 (not a linear relationship)
H1: B1 ≠ 0 (is a linear relationship)
a)
a. fail to reject the null hypothesis, there is insufficient evidence of a linear relationship
b)
b. fail to reject the null hypothesis, there is sufficient evidence of a linear relationship
c)
c. reject the null hypothesis, there is sufficient evidence of a linear relationship
d)
d. reject the null hypothesis, there is insufficient evidence of a linear relationship
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