Question

Let R unrestricted and R restricted be 0.4366 and 0.4149 respectively. The difference between the 9) unrestricted and the restricted model is that you have imposed two restrictions. There are 420 observations. The F-statistic in this case is:_______ A) 10.34 B) 4.61 C) 7.71 D) 8.01

Answer 1

Complete Question

Let R unrestricted and R restricted be 0.4366 and 0.4149 respectively. The difference between the 9) unrestricted and the restricted model is that you have imposed two restrictions. There are 420 observations. The F-statistic in this case is:_______

A) 10.34

B) 4.61

C) 7.71

D) 8.01

Answer:

The correct option is D

Explanation:

From the question we are told that

The
`R^2_(unrestricted ) = 0.4366`

The
`R^2_(restricted ) = 0.4149`

The number of observation is n= 420

Generally the number of independent variables is k(
`R^2_(unrestricted ) , \ n \ \ and \ R^2_(restricted )`) = 3

Then the number of restriction is (i.e
`R^2_(unrestricted ) \ and \ R^2_(restricted )`) is q = 2

Generally the F-statistics is mathematically represented as

`F = ((R^2_(unrestricted ) - R^2_(restricted))/(q) )/( ((1- R^2_(unrestricted )) )/(n-k-1) )`

substituting values

`F = ((0.4366 -0.4149)/(2) )/( ((1-0.4366) )/(420-3-1) )`

`F = 8.01`