- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 8. Hypothesis Testing
- Subject 6. The Decision Rule
CFA Practice Question
What type of decision is reached when the calculated value of any test statistic falls in the critical region when a false null hypothesis is being tested?
B. a Type I error
C. a Type II error
A. a correct decision
B. a Type I error
C. a Type II error
Correct Answer: A
User Contributed Comments 6
| User | Comment |
|---|---|
| virginia | When the calculated value falls in the critical region, you do not reject H0. Not rejecting H0 while it's false, shouldn't it be a Type II error? |
| tony1973 | if the test statistic falls in the critical region, you will reject the null hypothesis! As it is a false one, the decision is correct. |
| mtcfa | O think the wording here is tricky. A false null is always being tested. If it falls within the critical region (i.e. not outside, not significant), than the null cannot be rejected. |
| tssverma | yes..the question is testing whether the candidate understands the trick |
| mordja | Is not a trick. If you are testing a false null hypothesis (Ie you have previously found it to be false), and you now test it to find a statistically significant result then your previous decision is validated. I see no trick here, just need to be careful reading the question. |
| dybacis | Critical region is the set of all outcomes which cause the null hypothesis to be rejected. |