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Basic Question 9 of 10
True or False? If False, explain why.
Testing at a 5% level of significance means that you only have a 5% chance of rejecting the null hypothesis.
User Contributed Comments 4
| User | Comment |
|---|---|
| bobert | Would an also acceptable answer be: False, Testing at a 5% level of significance means that you only have a 5% chance of failing to reject the null hypothesis. I think that is right, just want to make sure the wording is correct. Any disagreements? |
| mordja | Bobert its a 5% chance of type one error, ie failing to accept the null hypotheses if the hypothesis is true. failing to reject the null when it is false is type two error. |
| johntan1979 | Only if the null is true... otherwise, statement is incomplete and unacceptable. |
| robbiecow | Shouldn't it be: the sign level is the probability of WRONGLY rejecting the null hypothesis if it is in fact true... Comments? |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
explain hypothesis testing and its components, including statistical significance, Type I and Type II errors, and the power of a test
CFA® 2025 Level I Curriculum, Volume 1, Module 8.