The t-ratio for testing ρ = 0 is equivalent to the t-ratio for testing β = 0.

Question

Quizplus · Accepted Answer

This statement is true. The t-ratio for testing ρ = 0 is equivalent to the t-ratio for testing β = 0 because ρ (rho) represents the correlation coefficient between two variables in a regression analysis, while β (beta) represents the slope coefficient of the independent variable. In simple linear regression, the correlation coefficient and the slope coefficient are related, and testing whether one of them is equal to zero is equivalent to testing the other one.

The T-Ratio for Testing ρ = 0 Is Equivalent to the T-Ratio