- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 8. Hypothesis Testing
- Subject 3. Test Statistic and Significance Level
CFA Practice Question
True or False? If False, correct the statement.
If we would reject a null hypothesis at the 5% level, we would also reject it at the 1% level.
Correct Answer: False
A result may be significant at the 5% level but not at the 1% level.
User Contributed Comments 3
| User | Comment |
|---|---|
| johntan1979 | The opposite is true... if reject at 1%, we would also reject it at 5%. |
| samet1990 | Can somebody explain please? |
| mcbreatz | Has to do with the width of the interval we are examining. A 1% level is the same as 99% confidence interval. To have the value fall within a given interval 99% of the time we need a wider interval total. So if we reject at 99% we will reject at the lower width of 95% or (1-.95)=5% |