- CFA Exams
- 2022 Level I
- Study Session 2. Quantitative Methods (2)
- Reading 6. Hypothesis Testing

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##### Learning Outcome Statements PDF Download

1. Introductiona. define a hypothesis, describe the steps of hypothesis testing, and describe and interpret the choice of the null and alternative hypotheses; | |

2. Null Hypothesis and Alternative Hypothesisb. compare and contrast one-tailed and two-tailed tests of hypotheses; | |

3. Test Statistic and Significance Levelc. explain a test statistic, Type I and Type II errors, a significance level, and how significance levels are used in hypothesis testing, and the power of a test; | |

4. Type I and Type II Errors in Hypothesis Testingc. explain a test statistic, Type I and Type II errors, a significance level, and how significance levels are used in hypothesis testing, and the power of a test; | |

5. The Power of a Testc. explain a test statistic, Type I and Type II errors, a significance level, and how significance levels are used in hypothesis testing, and the power of a test; | |

6. The Decision Ruled. explain a decision rule and the relation between confidence intervals and hypothesis tests, and determine whether a statistically significant result is also economically meaningful;
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7. Multiple Tests and Interpreting Significancef. describe how to interpret the significance of a test in the context of multiple tests; | |

8. Tests Concerning a Single Meang. identify the appropriate test statistic and interpret the results for a hypothesis test concerning the population mean of both large and small samples when the population is normally or approximately distributed and the variance is 1) known or 2) unknown; | |

9. Tests Concerning Differences between Means with Independent Samplesh. identify the appropriate test statistic and interpret the results for a hypothesis test concerning the equality of the population means of two at least approximately normally distributed populations, based on independent random samples with equal assumed variances; | |

10. Tests Concerning Differences between Means with Dependent Samplesi. identify the appropriate test statistic and interpret the results for a hypothesis test concerning the mean difference of two normally distributed populations; | |

11. Testing Concerning Tests of Variances (Chi-Square Test)j. identify the appropriate test statistic and interpret the results for a hypothesis test concerning 1) the variance of a normally distributed population, and 2) the equality of the variances of two normally distributed populations based on two independent random samples; | |

12. Tests Concerning the Equality of Two Variances (F-Test)j. identify the appropriate test statistic and interpret the results for a hypothesis test concerning 1) the variance of a normally distributed population, and 2) the equality of the variances of two normally distributed populations based on two independent random samples; | |

13. Parametric vs. NonParametric Testsk. compare and contrast parametric and nonparametric tests, and describe situations where each is the more appropriate type of test; | |

14. Tests Concerning Correlationl. explain parametric and nonparametric tests of the hypothesis that the population correlation coefficient equals zero, and determine whether the hypothesis is rejected at a given level of significance; | |

15. Test of Independence Using Contingency Table Datam. explain tests of independence based on contingency table data. |

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