A Sample of 200 Monthly Observations Is Used to Run

Multiple Choice

A sample of 200 monthly observations is used to run a simple linear regression: Returns = β₀ + β₁ Leverage + ε.A 5% 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 __________________________________________________________.

A) reject the null hypothesis and conclude that leverage significantly explains returns
B) reject the null hypothesis and conclude that leverage does not significantly explain returns
C) not reject the null hypothesis and conclude that leverage does not significantly explain returns
D) not reject the null hypothesis and conclude that leverage significantly explains returns