Problem no 1
a)
Ho :β1= 0 à the influence of TV advert expenditures in month t-1 on monthly sales in month t is not significant at 5% significance level
H1 : β1≠ 0 à the influence of TV advert expenditures in month t-1 on monthly sales in month t is significant at 5% significance level
b)
· Test statistic:
ti= b1S(b1)= 42.231.709=24.71
· Critical value:
t∝,n-k =t0.05, 20-4=2.1199
c)
Rejection rule:
Reject Ho if ti>tα
d)
Conclusion:
|24.71| > 2.1199, so we reject Ho
At 5% significance level we reject the null hypothesis, that the influence of TV advert expenditures in month t-1 on monthly sales in month t is not significant.
Lajira