Confidence Level and T value

CFA Level II Quant
#1

Alpha 0.0031 ( coefficients) ; 0.0070 ( standard of error) ; 0.4429 (t statistic) Beta 0.9068 ( coefficients) ; 0.1170 ( standard of error) ; 7.7504 ( t statistic)

1 . Test the null hypothesis, H0, that β for RBC equals 1 (β = 1) against the alternative hypothesis that β does not equal 1 (β ≠ 1) using the confidence interval approach. Solution to 1: The estimated β from the regression is 0.9068. The estimated standard error for that coefficient in the regression, s β is 0.1170. The regression equation has 58 degrees of freedom (60 − 2), so the critical value for the test statistic is approximately tc = 2.00 at the 0.05 significance level. Therefore, the 95 percent confidence interval for the data for any hypothesized value of β is shown by the range.

0.9068 ± 2.00(0.1170)

I got the above, but I didn’t understand how they got 2 if they weren’t given the confidence level

#2

They blew it. You need a confidence level or an α.

#3

They really should tell you an alpha or confidence level; they assumed .05 for alpha and .95 for the confidence coefficient, so they just were unclear.

#4

ok so im not going crazy

Did it ever happen that they never have given us the confidence level and we had to assume its 5%?

#5

There’s not enough evidence to conclude that.

No.

#6

thanks :slight_smile:

you are so funny with your " there is not enough evidence to conclude that" hahaha