CFA Practice Question

There are 985 practice questions for this topic.

CFA Practice Question

For the hypothesis test below, where the decision is whether to reject H0, then a ______ error could have occurred.

A. Type I
B. alpha
C. Type II
Correct Answer: A

When the decision is whether to reject H0, then a Type I error can occur (rejecting H0 when H0 is in fact true). The probability of a Type I error is the a-level. Essentially, a Type I error says that the random sample was due to chance and not an underlying change in the null hypothesis.

User Contributed Comments 3

User Comment
euniceyew how to know is type 1?
any calculation required?
can anyone explain further?
SuperKnight You know its type 1 because a decision to reject the null hypothesis has been made, the other (Type II error) occurs when you fail to reject the null hypothesis. Either decision, rejecting or failing to reject the null hypothesis will always leave you open to one of the errors.
bhaynes If we ever reject the Null, then there is a possible Type I error.

Not rejecting = possible Type II error
You need to log in first to add your comment.