Exercise 1

r= 0.81

N= 100

Question 1:

Testing H₀:r=0 vs.H_A:r0 at 1% significance level (two-sided test)

Note t_N-2,0.95=1.66; t _N-2,0.975=1.98; t _N-2,0.995=2.63

Question 2:

Testing H₀:r=0.8 vs.H_A:r0.8 (using table) at 5% significance level (two-sided test) Note Z_0.95=1.64; Z_0.975=1.96; and Z_0.995=2.58