- CFA Exams
- CFA Exam: Level I 2021
- Study Session 3. Quantitative Methods (2)
- Reading 11. Hypothesis Testing
- Subject 9. Hypothesis Tests Concerning Differences between Means

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**CFA Practice Question**

A hypothesis test is constructed at the 5% level of significance where the population standard deviation is unknown. A random sample of size n = 18 yields a sample mean of 67 and a sample standard deviation of 6. The critical value for H
A. -1.740

B. -1.645

C. 1.740

_{0}: μ < 65 is ______.

B. -1.645

C. 1.740

Correct Answer: C

Because the population standard deviation, σ, is unknown, we use a t-distribution: t(0.05, 18 - 1). Looking in the t-table under df = 17 and under column 0.05, we get 1.740. The rejection region is to the top 5%, so the critical value is 1.740.

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**User Contributed Comments**
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User |
Comment |
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irapp92 |
This would be a good test q.. no need to include a table as we should be able to conclude that the test stat is positive and there is only 1 positive answer |