Hypothesis Testing

Function :

𝑦 = 𝑓(𝑥)

Financial Econometric Model :

𝑑𝑘𝑐𝑙 = 𝛼 + 𝛽(𝑘𝑠𝑒𝑡)+∈𝑡

Step 1 :

H₀ : Their is no relationship between DGKL and KSE

H₁ : Their is a relationship between DGKL and KSE

Step 2 :

(1) Regression analysis

(2) T-test

Step 3 :

Level of significance 5%

Step 4 :

If estimated value >critical value then H₀ Reject critical value is (±1.96)

Step 5 :

Collection of data

Step 6 :

Analysis α & β Calculation

Step 7 :
As Estimated value -5.59>-1.96 & 147.184>1.96 so, H₀ Reject

As estimated p value 0.000 less then 10% so, H₀ Reject

R² = 84% means maximum variation exists (Ess/Tss)

̂𝒅𝒌𝒈𝒄𝒍𝒕 = −𝟐. 𝟓𝟒𝟕𝟑𝟗𝟖 + 𝟎. 𝟎𝟎𝟑𝟗𝟑𝟒∗ 𝐤𝐬𝐞𝐭

 Their is a significant relationship between DGKCL and KSE at 5% level of significance. It

means if 1 unit increase in KSE the DKGCL will increase by 0.003934 significantly.

H₀ : All estimators are equal to zero α^=0 , β^=0

H₁ : All estimators are not equal to zero α^≠0 , β^≠0