A student's t-test would be useful in (A). testing the significance of…

2023

A student's t-test would be useful in

(A). testing the significance of difference of two sample means
(B). testing the stationarity of a time series
(C). testing the significance of correlation coefficient
(D). testing the significance of a regression coefficient
(E). testing the goodness of fit of a model

Choose the correct answer from the options given below:

Answer: C. (A), (C) and (D) only.Concept: Student's t-test is a hypothesis test built on the t-distribution. Under the standard model assumptions (independent observations, an approximately…

  1. A.

    (A), (B) and (C) only.

  2. B.

    (B), (C) and (D) only.

  3. C.

    (A), (C) and (D) only.

  4. D.

    (A), (B), (D) and (E) only

Show answer & explanation

Correct answer: C

Concept: Student's t-test is a hypothesis test built on the t-distribution. Under the standard model assumptions (independent observations, an approximately normal sampling distribution for the statistic, and an unknown population variance estimated from the sample), it is used whenever a sample statistic — a mean difference, a Pearson correlation coefficient, or an estimated regression coefficient — is divided by its own standard error to test whether the true underlying value is zero.

  1. Testing the difference of two sample means — under the standard model assumptions, the two-sample (independent or paired) t-test tests whether μ1 equals μ2 by dividing the observed mean difference by its standard error, and the resulting statistic is referred to the Student-t distribution.

  2. Testing the stationarity of a time series — stationarity is assessed with a unit-root test such as the Augmented Dickey-Fuller test. Its statistic is computed in a t-like ratio form, but under the null of a unit root it is referred to Dickey-Fuller critical values, a distribution derived specifically for the unit-root setting.

  3. Testing the significance of a correlation coefficient — under the classical bivariate-normal assumptions, for a sample correlation r the statistic t = r√(n − 2) / √(1 − r2) is referred to the Student-t distribution with (n − 2) degrees of freedom.

  4. Testing the significance of a regression coefficient — under the classical linear-model assumptions (independent, normally distributed errors), each estimated coefficient in a linear regression is tested by dividing it by its own standard error, and the resulting statistic is referred to the Student-t distribution.

  5. Testing the goodness of fit of a model — goodness of fit is assessed with a chi-square test (for frequency/categorical data) or an F-test (for overall regression fit); the resulting statistic is referred to the chi-square distribution or the F distribution respectively.

Cross-check:

  • Stationarity testing and goodness-of-fit testing rely on statistics referred to their own distinct sampling distributions — Dickey-Fuller critical values, and the chi-square or F distribution respectively.

  • Under the standard model assumptions, mean-difference testing, correlation-significance testing, and regression-coefficient testing all share the same underlying form — an estimate divided by its own standard error, referred to the Student-t distribution — which is what defines a Student's t-test; the same ratio form can still land on a different distribution (as with the Dickey-Fuller statistic) when those assumptions do not hold.

So, among the five statements, the genuine Student's t-test applications are the mean-difference test, the correlation-coefficient significance test, and the regression-coefficient significance test — the time-series-stationarity test and the model-goodness-of-fit test are not.

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