Hypothesis testing in LRM

Question 1

What does one do if there is evidence against a null-hyputhesis?
If there is evidence “for” a n.h?

Answer 1

Evidence againt: reject the null

No evidence: do not reject null

Question 2

What are type I and type II errors?

Answer 2

Type I: Rejecting a true hypothesis

Type II: Not rejecting a false hypothesis

Question 3

What is the probability of commiting a type I error (notation) and what is is called?

Answer 3

Prob: alpha
Called: level of significance

Question 4

What is the probability of making a type II error called?

Answer 4

The power of the test

Question 5

What is s(sqrd) an estimation of?

What is then s an estimation of?

Answer 5

Estimation of sigma(square)

s, standard error of regression, is estimation of sigma

Question 6

What happens if we replace sigma(2) with s(2)in the OLS GM variance formulas?

Answer 6

we get the estimated variance of b1 and b2

Question 7

What is the square root of the estimated variances called and how are they denoted?

Answer 7

Called the OLS standard errors of regression parameters
Denoted SE(b1) and SE(b2)