Question

A sample of 200 monthly observations is used to run a simple linear regression: Returns =...

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 ________.

Math   Statistics-And-Probability   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Null Hypothesis - Leverage does not have a significant influence on returns ( that is beta1 is not significant that is beta1=0)

Alternate Hypothesis - Leverage has a significant influence on returns ( that is beta1 is significant that is beta1 is non zero)

We reject the null hypothesis if the p-value of the statistic is less than the level of significance (alpha)

Given - p-value =0.2770 alpha = 0.05

Since p-value > alpha => We fail to reject the null hypothesis that is we conclude that leverage does not have a significant influence on returns

The correct decision is to accept the null hypothesis

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The statistical model for simple linear regression is written as μy = β0 + β1*x, where...
The statistical model for simple linear regression is written as μy = β0 + β1*x, where μy represents the mean of a Normally distributed response variable and x represents the explanatory variable. The parameters β0 and β1 are estimated, giving the linear regression model defined by μy = 70 + 10*x , with standard deviation σ = 5. (multiple choice question) What is the distribution of the test statistic used to test the null hypothesis H0 : β1 = 0...
Researchers used a simple linear regression model to study relationship between daily servings of fruits and...
Researchers used a simple linear regression model to study relationship between daily servings of fruits and vegetables and blood cholesterol levels (mg/mL), and found the regression coefficient is -2.2 (i.e. negative 2.2). What is the correct interpretation of the coefficient?
The following table is the output of simple linear regression analysis. Note that in the lower...
The following table is the output of simple linear regression analysis. Note that in the lower right hand corner of the output we give (in parentheses) the number of observations, n, used to perform the regression analysis and the t statistic for testing H0: β1 = 0 versus Ha: β1 ≠ 0.   ANOVA df SS MS F Significance F   Regression 1     61,091.6455 61,091.6455 .69        .4259   Residual 10     886,599.2711 88,659.9271      Total 11     947,690.9167 (n = 12;...
1. A sample of data with n = 43 observations is used to run a multiple...
1. A sample of data with n = 43 observations is used to run a multiple regression with 5 independent variables. If this data set has SST = 1908.5 and SSR = 1055.4, what is the value of the adjusted multiple coefficient of determination? Round your answer to three decimal places. 2. A sample of data with n = 43 observations is used to run a multiple regression with 6 independent variables. If this data set has SST = 1314.8...
In a regression analysis involving 27 observations, the following estimated regression equation was developed. ŷ =...
In a regression analysis involving 27 observations, the following estimated regression equation was developed. ŷ = 25.2 + 5.5x1 For this estimated regression equation SST = 1,550 and SSE = 530. (a) At α = 0.05, test whether x1  is significant.State the null and alternative hypotheses. H0: β1 ≠ 0 Ha: β1 = 0 H0: β0 ≠ 0 Ha: β0 = 0    H0: β0 = 0 Ha: β0 ≠ 0 H0: β1 = 0 Ha: β1 ≠ 0 Find the value...
In a regression analysis involving 27 observations, the following estimated regression equation was developed. ŷ =...
In a regression analysis involving 27 observations, the following estimated regression equation was developed. ŷ = 25.2 + 5.5x1 For this estimated regression equation SST = 1,600 and SSE = 550. (a) At α = 0.05, test whether x1is significant.State the null and alternative hypotheses. H0: β0 = 0 Ha: β0 ≠ 0 H0: β0 ≠ 0 Ha: β0 = 0    H0: β1 ≠ 0 Ha: β1 = 0 H0: β1 = 0 Ha: β1 ≠ 0 Find the value...
After running a regression on 60 monthly observations of a fund's returns on the returns of...
After running a regression on 60 monthly observations of a fund's returns on the returns of a stock market index, you find the estimate of the slope coefficient of 0.73 with a standard error of 0.27. You are interested in testing the hypothesis of whether the slope is equal to 1. What is the t-statistic for this hypothesis test? (Bonus thinking question: can you reject the null hypothesis that the slope = 1 at a 5% confidence level?) The answer...
In a regression analysis involving 27 observations, the following estimated regression equation was developed. ŷ =...
In a regression analysis involving 27 observations, the following estimated regression equation was developed. ŷ = 25.2 + 5.5x1 For this estimated regression equation SST = 1,600 and SSE = 550. (a) At α = 0.05, test whether x1 is significant. State the null and alternative hypotheses. H0: β0 = 0 Ha: β0 ≠ 0H0: β0 ≠ 0 Ha: β0 = 0    H0: β1 ≠ 0 Ha: β1 = 0H0: β1 = 0 Ha: β1 ≠ 0 Find the value of...
Use the following results obtained from a simple linear regression analysis with 12 observations. = 37.2895...
Use the following results obtained from a simple linear regression analysis with 12 observations. = 37.2895 − (1.2024)X r2 = .6744sb = .2934 Test to determine if there is a significant negative relationship between the independent and dependent variables at α = .05. Give the test statistic and the resulting conclusion.  
1. Suppose (X, Y) take on values {(1,10),( 3,11),( 8,9),( 4,15),( 7,20)}. Construct a simple linear...
1. Suppose (X, Y) take on values {(1,10),( 3,11),( 8,9),( 4,15),( 7,20)}. Construct a simple linear regression model treating Y as the dependent variable, the LSE of the intercept 2.Suppose you construct a simple linear regression model. Using 5 observations the LSE of the slope is calculated as -0.3 with associated standard error .86. Now you wish to test  versus  at the 0.05 significance level. The test statistic is
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT