After studying the milk yields of a randomly selected sample of

1,000

cows, researchers felt that the presence of white spots

(WSi)

on a cow's body led to a different level of milk production

(MPi).

The researchers estimate the OLS regression:

MPi=5.84+0.26WSi,

(2.23)

(0.08)

where

WSi

is a binary variable of the form:

WSi=

1,iftheithcowhaswhitespots

0,iftheithcowdoesn'thavewhitespots

.

The 95% confidence interval for the coefficient

1

is

(enter your response here,

enter your response here).

(Round

your answers to four decimal

places.)

Based on this interval, we will

fail to reject

reject

the hypothesis

1=0

at the 5% significance level.

Which of the following statements describes the way in which the coefficient of the indicator variable could be interpreted in this case?

A.

The coefficient of the indicator variable is the slope of the regression equation.

B.

The coefficient is the rate of change in the milk production due to a unit change in the number of cows with white spots.

C.

The coefficient is the difference between the population means of the milk production of cows with and without white spots.

D.

The coefficient is the sum of the conditional expectation of the presence of white spots on a cow with respect to the average milk production.

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