Question: Batten runs a regression analysis using Stellar monthly returns as the dependent variable and the monthly change in CPIENG (US Consumer Price Index for Energy)

Batten runs a regression analysis using Stellar monthly returns as the dependent variable and the monthly change in CPIENG (US Consumer Price Index for Energy) as the independent variable. He compiles the summary statistics for the 248 months between January 1980 and August 2000.

Batten wants to determine whether the sample correlation between the Stellar and CPIENG variables is statistically significant. The calculated t test-statistics is -2.3017.The critical value for the test statistic at the 0.05 level of significance is approximately ±1.96. Batten should conclude that the statistical relationship between Stellar and CPIENG is:

Options:

significant, because the calculated test statistic has a lower absolute value than the critical value for the test statistic.

significant, because the calculated test statistic has a higher absolute value than the critical value for the test statistic.

not significant, because the calculated test statistic has a higher absolute value than the critical value for the test statistic.

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