- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 8. Hypothesis Testing
- Subject 1. The Process of Hypothesis Testing
CFA Practice Question
The meaning of "testing the hypothesis μ <= 6 versus μ > 6 at a 5% significance level" is ______
B. if the population mean μ is <= 6, the probability of deciding wrongly is at most 5%.
C. if the population mean μ is > 6, the probability of deciding wrongly is at most 5%.
A. if the population mean μ is > 6, the probability of deciding wrongly is at least 95%.
B. if the population mean μ is <= 6, the probability of deciding wrongly is at most 5%.
C. if the population mean μ is > 6, the probability of deciding wrongly is at most 5%.
Correct Answer: B
User Contributed Comments 5
| User | Comment |
|---|---|
| dcfa | Type I Error=level of significance=probability of rejecting null hypothesis when it is true |
| bidisha | H0= u>6 , h1 = u<= 6 |
| Seancfa1 | Bidisha...? |
| enetis | u<=6 at 5% significance implies that prob u>6 is 95% |
| dbedford | We are basically saying "If we accept the research hypothesis that the population average is less than or equal to 6, then there is a 5% chance we'll be wrong |