CFA Practice Question
John has just performed a hypothesis test and has calculated the p-value to be 0.13, which of the following is most likely to be true?
A. Do not reject the null hypothesis at the 10% significance level, and reject the null hypothesis at the 5% significance level.
B. Do not reject the null hypothesis at the 10% significance level, and do not reject the null hypothesis at the 5% significance level.
C. Reject the null hypothesis at the 10% significance level, and do not reject the null hypothesis at the 5% significance level.
Explanation: The p-value is the smallest value of alpha for which the null hypothesis is rejected. If the p-value is greater than or equal to the significance level , the null hypothesis is not rejected.
If the p-value is smaller than the significance level, the null hypothesis is rejected. As the p-value in this question is 0.13, the null hypothesis is not rejected at the 5% or 10% significance level.
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