Consider the regression model below and let (Xi, Yi), i = 1, ..., n be an i.i.d. set of observations.
Yi = β0 + β1Xi + ui
Specify the order of the 3 steps required to test the null hypothesis that the slope coefficient β1 equals zero? That is,
H0: β1 = 0
A. Compute the t - statistic, t = (β̂1act - 0) / SE(β̂1act)
B. Compute the p - value, PrH0 (|t| > |tact|)
C. Compute the standard error of the estimated slope coefficient β̂1act, SE(β̂1act) = √σ̂2β̂1
(Enter 1, 2 or 3 in each box)