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A sample of 200 monthly observations is used to run a simple linear regression: Returns = ?0 + ?1 Leverage + ?. A five percent level of significance is used to study if leverage has a significant influence on returns. The value of the test statistic for the regression coefficient of Leverage is calculated as t198 = -1.09 with an associated p-value of 0.2770. The correct decision is to:

Reject the null hypothesis and conclude that leverage significantly explains returns

Reject the null hypothesis and conclude that leverage does not significantly explain returns.

Do not reject the null hypothesis and conclude that leverage does not significantly explain returns.

Do not reject the null hypothesis and conclude that leverage significantly explains returns.

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Statistics and Probability, Statistics

Category:- Statistics and Probability
Reference No.:- M91014479

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