Exchange rate (EXC) can be defined as the price of a nation’s currency in terms of

another currency. There are two components in an exchange rate that are the domestic

currency and a foreign currency, and can be quoted either directly or indirectly. The

easier to quote the exchange rate is when in direct quotation where the price of a unit of

foreign currency is expressed directly in terms of the domestic currency. It is very

different with an indirect quotation where the price of a unit of domestic currency is

expressed in terms of the foreign currency. Sometimes, an exchange rate will known as

a cross currency or cross rate if it is do not have the domestic currency as one of the

foreign currency.
Since the abolishment of the fixed exchange rate system of Bretton Woods in

1971, the movement of exchange rate have been a big concern for investors, analyst,

managers and shareholders. With this, the system has been exchanged for a floating

rate system where the price of the currencies is determined by supply and demand

money. According to Abor (2005), this new system is responsible for currency

fluctuations because there are frequent changes of supply and demand are influenced

by many external factors. Due to currency fluctuations, foreign exchange risks the

company faces. In addition, if the economy becomes more open trade is constantly

increasing and makes the company more vulnerable to fluctuations in foreign exchange

rates. According to Adler and Dumas (1984), foreign exchange exposures is the

sensitivity of changes in the real domestic currency value of assets, liabilities or

operating incomes to unanticipated changes in exchange rate.
The Thai baht abandoned its peg to the US dollar in July 2nd, 1997. The

adjustment from highly constant exchange rate regimes in Asia to floating regimes was

related with a sharp increase in exchange rate variability. The Asian stock markets

slumped on average between 40 and 60 per cent, while the currencies of Indonesia,

South Korea and Thailand each gone nearly half of their value within for one year. It is a

general trust that the majority recent Asian financial crisis is more widen than previous

crises, and hence is exerting a bigger effect on commodity prices, financial markets and

economic activity throughout the world; the perception has arisen that the crisis has been

stronger in its impact on the affected local and global economies. Worldwide economic

growth slow-moving, commodity prices were bring to a historical low, risk premiums in

debt markets increased, both stock market volatility and capital flows enhanced while

confidence indicators slumped around the globe. Additionally, the Asian crisis appears to

be more deeply rooted in financial imbalances in the private sector than in the public

sector financial problems that characterized the 1980s debt crisis and the 1994‐1995

Mexican crisis. The wide currency fluctuations experience during the 1997 Asian crisis

raised a diversity of questions not only about their impact on affect economies, but also

about their influence on the potential weakness of multinational firms to foreign exchange

Besides that, foreign direct investment has proved be maintain and flexible during

financial crises. As an example, it was crucial in East Asian countries during the global

financial crisis between 1997 and 1998. It very different to the other forms of private

capital flows as mention by (Dadush, 2000; Lipsey, 2001) where portfolio equity and debt

flows and particularly short-term flows were subjected to large reversals during the equal

period. The resilience of FDI during financial crises was also can see during the Mexican

crisis of 1994-1995 and also the Latin American debt crisis of the 1980’s. This flexibility

and strong have led many developing countries to favour FDI over other forms of capital

flows. There are some risks that need to be measured and between them is the

fluctuation of exchange rate in any FDI undertaken. The fluctuation of exchange rate is

the one of the basic risk measure that confronts such investors, and it is also refers to

the short-term deviations of the exchange rate around its long-term trend. The

fluctuations whether uptrend or downtrend, are undesirable because they have the

tendency of increasing risk and uncertainty in international transactions and they will

encourage the flows of trade and investment. It must take attention to the firm stage

different structural models have been developed to measure the effectiveness of these policy prescriptions on the African economies. the structural stability of the economy is causes of the positive response of output and price to changes in fiscal and exchange rates policies. 1997). With a support from the World Bank during the economic crisis in the 1950s. a few policies had been purposed and implemented by the International Monetary Fund (IMF. Therefore. there has been an experiment extensively in developing countries about the stabilization aspects of fiscal and exchange rate policies. Even using different methods and different results in studies but have a consensus on how to model. which explains the effect of increasing the trade exchange rate fluctuations and more published evaluating these ideas empirically. it will reducing the possibility of hedging against the volatile nature of the exchange rate. Besides that. World Bank and government causes of the poor economic performance around year 1970s and 1980s in most African economies. In addition. The relative prices of currencies began to fluctuate after the post-war Bretton Woods system of fixed exchange rates collapsed in 1973 where these fluctuations causes of increasing uncertainty to traders. This policy is to handle the economic crisis that comes in our country. the futures or forward market is non-existent in the Sub-Saharan region in general and Ghana in particular. Thailand has run a much . or how to measure properly and exchange rate fluctuations.because exchange rate volatility can make the dissimilarity between naturally competitive firms being prosperous and closing down. the studies that have explored the effects of the real exchange rate on the balance of trade between Thailand and its major trading partners. Unfortunately. there are many theoretical papers that have been written at the beginning of the current float. Actually. This risk may influence the volume of international trade. In recent years. Since then. The risk that faced by firms and investors as a causes of exchange rate volatility that can be reduced by hedging against such risk through the exercise of futures or forward contracts. Among such prescribed policies were change in the exchange rates and reduction in government expenses.

Due to the early development process of import substitution plunged during the crisis of the early 1980s. Societe Generale strategists Jason Daw and Frances Cheung stated that Malaysia’s central bank struggled . currency crisis had happened in Malaysia in 1997-1998 where this crisis started in Thailand. where they strive to maintain a competitive edge in the global economy by moving their labor-intensive operations to Thailand and neighbouring countries. the Malaysia Ringgit (MYR) depreciated more than 20 percent relative to the US Dollar (USD) from 1st of September 2014 until today. 1. most of Southeast Asia and Japan saw slumping currencies. dollar. As the crisis spread.S. particularly from Japan. There is a large infusion of foreign capital. policy makers later launch export-oriented program. Besides that.focused way the development of the industry.2 PROBLEM STATEMENT Based on previous study. devalued stock markets and other asset prices. and a precipitous rise in private debt. Infrastructure that has large investments is also included in this core projects mainly in the industrial city that has a strong market orientation. At the time. Thailand had acquired a burden of foreign debt that made the country effectively bankrupt even before the collapse of its currency. It happened when financial collapse of the Thai baht after the Thai government was forced to float the baht due to lack of foreign currency to support its currency peg to the U.

2) To study the relationship between Inflation Rate and Exchange Rate in Malaysia. It is important because the researcher will know which factor those give larger affect to exchange rate.3 OBJECTIVES The purpose of this study is to investigate about the impact of gross domestic product (GDP). inflation rate and foreign direct investment impact the exchange rate in Malaysia. This is because previous studies showed that the strong economic growth of Malaysia depends to the stability in exchange rate. To come out with a result that show whether the three economic factors will positively or negatively influence the exchange rate. As the title of this research implies. 1. 1. the economic performance in Malaysia can affect the fluctuation exchange rate of Malaysia. 1) To investigate the relationship between Gross Domestic Product and Exchange Rate in slow the ringgit’s 18 percent plunge over the past 12 months. Thus. the study was carried out to fulfil the following objectives. there many several factors that affect on exchange rate in Malaysia. the research questions are as follows: . Specifically. The general questions are on the changes of the gross domestic product. 3) To examine the relationship between Foreign Direct Investment and Exchange Rate in Malaysia.4 RESEARCH QUESTIONS The impacts on exchange rate are the focus on the study which ponders in whether changes in other macroeconomic variables could be significantly influenced the exchange rate. inflation (INF) and foreign direct investment (FDI) towards an Exchange Rate (EXC). This paper identifies some of the main factors that affects on exchange rate in Malaysia. Furthermore.

It also can build a more analytical style of thinking as a researcher had to explore the possibility of a large state in carrying out an investigation. Ha: there is a significant relationship between FDI and exchange rate. hypothesis can be defined as a logically conjectured relationship between two or more variables expressed in the form of testable statement. Therefore. 1. 1. Hypothesis 2 H0: there is no significant relationship between inflation and exchange rate. 1) Does the gross domestic product give an impact to the exchange rate? 2) Does the inflation give an impact to the exchange rate? 3) Does the foreign direct investment give an impact to the exchange rate? 1. the generalizability of the results is limited to only the country of . In this study. there are three (3) hypotheses that the researcher wants to analysis that are related to the objectives of the study such as follows: Hypothesis 1 H0: there is no significant relationship between gross domestic product and exchange rate. Hypothesis 3 H0: there is no significant relationship between FDI and exchange rate. Ha: there is a significant relationship between inflation and exchange rate.6 SIGNIFICANCE OF THE STUDY Studies on this topic opens some opportunities for researchers to develop his knowledge and responsive to the powers of the current macroeconomic impinging on the economy and their relative importance to the movement of the currency in Malaysia.5 HYPOTHESIS According to Uma Sekaran (2009). Ha: there is a significant relationship between gross domestic product and exchange rate.7 SCOPE OF THE STUDY The constructs and outcome of this study will be limited only to the case of Malaysia.

The different benchmark or rules and regulations maybe because the data are out to date and cannot be using anymore. the data for this study such as exchange rate. But.8 LIMITATIONS OF THE STUDY 1. 1.2 Accessibility of Sources Researcher confronts a considerable measure of inconvenience in gathering the information of the variables because of lack of experience and skill.8.1 Time Contraints The time given to finish this study is limited for several months. gross domestic product. the progress of the work have not been done smoothly as the time spends must be divided between the task given by the company during the internship and time to finish the research proposal. Inflation Rate. Moreover. Foreign Direct Investment and Exchange Rate itself). inflation and foreign direct investment data can be collect from internet websites such as the global economics website.concern. The period under investigation runs from year 1970 to 2014 which is 45 years and involves four macroeconomic variables (Gross Domestic Product. 1. Malaysian statistic department and many more.8. 1. Due to time constraints. more time is needed to study about topic of research to ensure it is within the scope of study. start from February 2016 until June 2016.3 Skill and Expertise In this study the researcher faces difficulties to find an article and journal for literature review because not all journals can be accessed. which are 4 months.8. .

GDP contains many elements of consumption.9. .1 Dependent Variable 1.9 DEFINITION OF TERMS 1. 1.2.1. the MYR-USD exchange rate is utilized in order to represent the measurement. More specifically.2 Independent Variables 1. There are two components of an exchange rate which are the domestic (unit) currency and a foreign (reference) currency. which is the generic currency that is used in most international transactions. ie quarterly or yearly.9.9. exports and imports to determine where the real GDP. In this study.1.9. This pair of currency is selected since the intention is to associate the Malaysian Ringgit to the world’s leading exchange rate (the United States Dollar). GDP represents the value of all goods and services produced within the geographical boundaries of a country in a given period of time.1 Exchange Rate (EXC) Exchange rate is the price of a nation’s currency in terms of another. government spending.1 Gross Domestic Product (GDP) Gross Domestic Product (GDP) is the broadest measure quantitatively a country's overall economic activity. investment.

open economies with skilled workforces and good growth prospects tend to attract larger amounts of foreign direct investment than closed.9. where the overseas institutions invest in equities listed on a national stock exchange. The prices of goods and services increase at a slower rate where the inflation is low.2. A country with a consistently lower inflation rate exhibits a rising currency value while a country with higher inflation typically sees depreciation in its currency and is usually accompanied by higher interest rates. into a company or entity based in another country.2 Inflation Rate (INF) Changes in market inflation cause changes in currency exchange rates. 1. Foreign direct investments different with indirect investments such as portfolio flows.9.1. highly regulated economies.2. Entities making direct investments typically have a significant degree of influence and control over the company into which the investment is made. A country with a lower inflation rate than another does will see an appreciation in the value of its currency. At the same time. .3 Foreign Direct Investment (FDI) Foreign direct investment (FDI) is an investment made by a company or entity based in one country.

CHAPTER 2 LITERATURE REVIEW 2. investor and Policy maker focused on the exchange rate of country and then make investment their money in that focused country. By increasing exchange rate of a country the domestic export goods become cheaper and it also increases the demand of export. It impacts on FDI. They have believed that increase in exchange rate creates competitive advantages in international trade. Economics. all of these effects ultimately on GDP of the country.1.1 Exchange Rate (EXC) Exchange rates have main role that affect the macroeconomics performance of any leading country.Internal balance is defined by full employment and low inflation. Coudert and Couharde (2008) had mentioned the external balance can be characterized by a current account in line with fundamentals such as saving and investment balances across countries or external debt sustainability.1 LITERATURE ON DEPENDENT VARIABLE 2. According to Mustafa and Nishat (2004). Besides that. Besides that. it means international demand of goods will increase and import will be decreased. when exchange rate moves from fixed to flexible exchange rate it means we are facing instability in exchange rate. Kannan (2009) stated in his study . This will result in the collapse of the currency crisis in the country. an approach to the fundamental equilibrium exchange rate that allows the economy to achieve both internal and external equilibriums (Gala and Lucinda. Khan (2012) also mentions that the exchange rate is a most important in an open economy it has direct on the macroeconomics factors like FDI and GDP. 2006) .

McPherson. the supply and demand for a currency comes from both trade flows (exports and imports) and capital flows (investments and borrowing).1 Gross Domestic Product (GDP) The developing and emerging economies are not more efficient due to which they are exposed by the exchange rate fluctuation which has often a negative impact (Bodnár. K. Exchange rates are required to encourage worldwide exchange including buying goods and services or capital from a nation utilizing the others exchange rate.M. a high economic growth rate is most likely accompanied by a high investment rate and high export growth as well.A.2 LITERATURE ON INDEPENDENT VARIABLES 2. 2007). that exchange rate fluctuation may influence many aspects in the economics such as open economy and will give the impact to the others nations. resulting in nominal appreciation pressure on the currency unless the central bank intervenes in the foreign exchange market and accumulates foreign reserves.. So. and the financial flows. but it is finding through markets’ interaction. (2006). According to Rugman. (2006). 2. than the trade shocks has negative impact on the real GDP. & Rakovski.2.. According to Qaisar ABBAS and et . According to Madura. S. This market interaction finds exchange rate value through demand and supply. R. When there is a fixed or peg exchange rate system. J. the government in freely floating exchange rate does not find the values of transaction currency. Collinson.. Lamberte (2010). M. Besides that. (2000) had been concluded that there is no relationship of gross domestic product (GDP) and interest rate with exchange rate. & Hodgetts. the “real” flows. M. the balance of payments implications for exchange rates must include both sides of the story. However. Successful exports produce current account surpluses.F. T.

Inflation can likewise be brought about by an ascent in the costs of imported things for example. There are three independent variables which are inflation. interest rate and Gross Domestic Product were used in order to investigate their relationship which causes exchange rate fluctuations. Hypothetically a low inflation rate situation will show a rising money rate. It was found that inflation is one of the effect that changed by genuine total national output. as the acquiring influence of the cash will increment when contrasted with different monetary standards (Duarte. 2001). A softly pegged exchange rate regime. In any case.2 Inflation (INF) The rate of inflation in a country can have a major impact on the value of its currency and the rates of foreign exchange it has with the currencies of other nations. inflation is just one factor among many that combine to influence a country's exchange rate.2. For the most part. 10 African countries with 15 years of data from 1996 to 2010 were used for previous study. they mentioned that the relationship (2012). oil. may increase financial instability (Berger and Wagner. although it may be a successful strategy for controlling inflation. The past studies demonstrates the investigated the conceivable impacts of drop in rate of trade on rate of inflation in Nigeria somewhere around 1986 and 2008. gross domestic product. this kind of inflation is typically vanishing. the inflation rate is utilized to quantify the value security in the economy. and Stockman.2011). diminishing in outside exchange rate furthermore the supply of cash with deterioration managing its short run give sway over the long run and in a significant relationship (Imimole and Enoma . However. 2002). 2. inflation and real interest rate with the exchange rate. Inflation refers to the central point that influences the exchange rate. and less critical than the auxiliary inflation brought about .

Subsequently. As expressed by Mishkin (2004) the meaning of inflation is dependably and all over a fiscal wonder. according to Campa (1993). as it reduces production costs and wages in the host country (Cushman. inflation is ascending in the general level of price of merchandise and benefit in an economy over a timeframe. they are increasing their investments in this market. So.3 Foreign Direct Investment (FDI) The inflow of foreign direct investment (FDI) is important for the economic development of a country. This can be evidenced in our previous study (Bleaney and Greenaway. when dealing with the other side of the coin. . Furthermore. the model applications to appreciation currency countries home increase FDI inflows. In economies. Instead. inflation likewise related in the acquiring influence of money. Researchers have found a strong link between the exchange rate and the presence of FDI affects the rate of change. According to Sattar and Rehman (2012). 2001) says countries using the currency of an attempt to influence the FDI inflows from countries with a weak currency. 2. a multinational company looking for profit in the local market and if they are confident about future profits. 2011). 2003). but the world market for FDI has become more competitive. but decreased depreciation of the Japanese currency against the currency of the host country is Asia (Takagi and Shi. 1988). Goldfajn and Minella. FDI increases with increased volatility of exchange a supply of money (Fraga. cash flow led to the presence of FDI. the country's FDI can also cause an increase in the exchange rate with the output or input with damping. This statement was reinforced by another study where there is a drop in the real value of the currency of the primary host to promote an increase in FDI inflows.

.. (2012). It contributes the points of attentiveness and the significant approach to acquire the data required to structure and tackle the issues.1 Exploratory Study Research design is necessary rule that encouragement the information accumulation technique and division piece of the exploration method. & Ayaz. Bilawal et al. .1: Theoretical Framework INDEPENDENT VARIABLES DEPENDENT VARIABLE Gross Domestic Product Inflation Rate Exchange Rate Foreign Direct Investment Sources from : Abbas. 2.. 2014 CHAPTER 3 RESEARCH METHODOLOGY 3.8. It is known as a rule and essential to lead a research study.1. Q. Iqbal.1 RESEARCH DESIGN 3.3 THEORETICAL FRAMEWORK / MODEL SPECIFICATION Below is the theoretical framework of the study: Figure 1.

1 Secondary Data In this study. This investigation will evaluate the relationship between exchange rate with gross domestic product. 3. This study is using the exploratory study. The researcher has taken a long time-series of annually data because it can help to more accurately forecast the dependent variable of concern. The secondary data usually in the form of history. exploratory research lays the initial groundwork for future research. while data on Inflation Rate (INF) was collected from the Malaysian Department of Statistics.2. the type of data applied is secondary data. the data on Exchange Rate (EXC) was collected from the Bank Negara Malaysia website. For the independent variables. gathered and recorded by individual or group of researchers prior to the current need of the new researchers. Exploratory study can be defined as the initial research into a hypothetical or theoretical idea. data on Gross Domestic Product (GDP) and Foreign Direct Investment (FDI) were sourced from Bank Negara’s website. Annual data is employed for all variables which cover the period of 1970 until 2014 (45 time series observation). or to determine if what is being observed might be explained by a currently existing theory. An exploratory research project is an attempt to lay the groundwork that will lead to future studies. Most often. Secondary data is the data that already exist. already assemble and it easy to access. inflation and foreign direct investment.2 TYPES OF DATA 3. This is where a researcher has an idea or has observed something and seeks to understand more about it. 3.3 DATA COLLECTION METHOD AND STUDY PERIOD The researcher has used secondary data in completing this study. . Specifically.

below are the types of measurement or proxies that are used to represent the macroeconomic variables of concern: 3. it is measured by using middle rate of Malaysia Ringgit to United States Dollar (MYR/USD).1 Exchange Rate (EXC) For the exchange rates.4. However. . Therefore.4 MEASUREMENT OF DATA This part will explain about the type of variables that are computed with different aspect and element. 3. This is so since it can best represent the price of the national currency (Ringgit) against the world’s number one currency. any discrepancies that occur were handled by prioritizing the data coming from legitimate governmental websites which are the central bank of Malaysia and the Department of Statistics. All downloaded data are cross compared with those coming from various databases which include DataStream and Trading Economics. This is because every variable has different unit and can be represented by many different kinds of indicators.

There are a few tests that have been run to test the hypotheses developed earlier. The researcher will use the FDI flows that are a combination of the both flows to represent for this study. 3. 3. 3. Inflation rate also be called as ‘the growth rate of CPI’ because it is derived from two values of CPI from two time periods.3 Inflation (INF) Past studies typically use either CPI or the inflation rate itself in representing price level in a country.4 Foreign Direct Investment (FDI) The FDI have two flows that are the FDI inflows and outflows. the variable is represented by the GDP at market price due to its ability in representing the economic activities that are happening inside the countries.2 Gross Domestic Product (GDP) For GDP.4. Theoretically.5 PROCEDURES OF DATA ANALYSIS Data analysis is a process of evaluating data systematically by applying statistical or logical method in order to interpret the data so that we are able to conclude solutions for the research based on the outcome of the data. Data analysis is an important part of a research since it will show whether or not the objective of the study is achieved.4. This study is using the inflation rate itself because CPI values are a lagged version of the inflation rate.4. 3. . GDP at market prices is the final result of the production activity of resident producer units which will be ideal for representing the amount of output produced in Malaysia.

unit root test and Multiple Regression Result which is consist of coefficient. mean. There are 45 numbers of data collected by the researcher by using annually data started form year 1970 until 2014.1 Descriptive Statistics The present study employs the max. normality test.5. The time series analysis is chosen to study the factors of exchange rate. The data gathered must be transfer into Microsoft Excel format. The entire descriptive statistics analysis is performed using the Eviews 7. . The purpose of applying the descriptive statistics analysis is to understand the characteristics of the data in the present study. Mean is the score at the exact mathematical centre of distribution (average). Jarque – Bera (JB) statistic for the descriptive statistics analysis. M =∑ X /N It is used with interval and ratio scales. R-Square. All the data inserted on annually basis from the year 1970 until 2014. It is not accurate when distribution is skewed because it is pulled towards the tail. The raw data is key in into the Microsoft Excel software. Next. The researcher use time series analysis in this research. min. standard deviation. Min is minimum value of the series in the present sample. 3. All of the data is collected from Bank Negara Malaysia and other online database. F-Statistic and T-Test. the researcher copy the data from excels to the E-views 7 software and then run the data. Then run the data for descriptive statistics. kurtosis. skewness. Max is the maximum values of the series in the current sample.

….. . Kurtosis is a measurement of whether the data are peaked or flat relative to the normal distribution (Gujarati.2003). YN the formula for skewness is: Yi−Y´ ¿=1( ¿)3 ( N−1 ) s 3 skewness=∑ ¿ Where Y´ is the mean. and N is the number of data points. 2003).. For unvariate data Y1. Standard deviation is a measure of dispersion or spread in series. Y2. The skewness for a normal distribution is zero. When N is the number of the observations in the current sample and ´x is the mean of the series x x−´¿ ¿ ¿2 ¿ ∑¿ ¿ δ=√ ¿ Skewness means that the distribution has the long right tail and negative skewness implies that the distribution has a long left tail (Gujerati. Negative values for skewness indicate data that are skewed left and positive values for the skewness indicate data that are skewed right.s is the standard deviation. and any symmetric data should have skewness near zero.

d. If kurtosis exceed 3 the distribution is peaked proportional to normal (Gujarati. The multiple regressions model is the extension of the simple regression model (Keil. with constant and with constant and trend.2 Unit Root Test This test is used to test whether the variables in the research are non- station or station. means that the test for unit root test is in level and first different.5. 3.kurtosis=∑ ¿=1 ( Yi−Y´ ) 4 ( N −1 ) s 4−3 The standard normal distribution has kurtosis of zero. The models analyzed are: . The positive kurtosis means the peaked distribution while negative kurtosis is flat distribution. 2003). The higher the negative number means the stronger the rejection of null hypothesis. If the t-value is less than ADF critical value thus we reject null hypothesis which mean unit root does not exist. The normal distribution is 3. The rules are when the t-value is more than ADF critical value.3 Multiple Regression Model The multiple regressions model planned to explain that the outcome of a research does not only influence by the characteristic of one variable but other variable as well.2 Normality Test Normality test is used to determine whether a data set that is well model by a normal distribution and to calculate how likely it is for a random variable underlying the data set to be normally distributed.5. There are three types of ADF test which are without constant and trend.). 3. A negative and positive number is used in the test. 3. n. we cannot reject null hypothesis but we accept null hypothesis.5.

1 to 0.5 Weak 0.5.5. 3.6 to 0.5 F-Test F-statistic test is the test that has an F-distribution under the null hypothesis.99 Strong 1 Perfectly explained 3. Relationship Between Dependent R2 And Independent Variables 0 No relationship 0.4 R-Squared R-square is a statistical measure to know how close the data to the fitted regression line. It is used when comparing statistical models that have been fitted to a data set in order to identify the model that best fits the population from which the data were sampled.5. Y = β0 + β1X1 + β2X2 + β3X3 + ε Y = The dependent variable β0 -3 = The regression model coefficients determined in the analysis X1 -3 = The independent variables ε = The random error term 3.4 Coefficient Coefficient is a statistical method that explains the variability of a factor that can be explained by its relationship to another factor.6 T-Test T-test is a statistical examination of two population meaning.5. 3. A two sample of t-test is examines whether two different samples and is usually .

df = degree of freedom n = no of variables k = no of observations .used when the variance of two normal distributions were unknown and when the experiment using a small sample size. df=n-k-1 where.