The following model was fitted to data on 90 German chemical companies:

where the numbers in parentheses are estimated coefficient standard errors and
y = share price
x1 = earnings per share
x2 = funds flow per share
x3 = dividends per share
x4 = book value per share
x5 = a measure of growth
a. Test at the 10% level the null hypothesis that the coefficient on x1 is 0 in the population regression against the alternative that the true coefficient is positive.
b. Test at the 10% level the null hypothesis that the coefficient on x2 is 0 in the population regression against the alternative that the true coefficient is positive.
c. The variable X2 was dropped from the original model, and the regression of Y on (X1, X3, X4, X5) was estimated. The estimated coefficient on X1 was 2.95 with standard error 0.63. How can this result be reconciled with the conclusion of part a?

j) = 0.819 + 2.1 1x1 + 0.96x2-0.05% + 5.87x4 (1.79 1940.144) 408) + 0.00226x5 R2 = .410 (0.00115)