- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 8. Hypothesis Testing
- Subject 2. Null Hypothesis and Alternative Hypothesis

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**CFA Practice Question**

In 2007, the DEA found that 12% of teenagers (13-19 years) used illegal drugs. In 2011, to check to see if there was a change in usage, a stduy of 1000 randomly selected teens produced 100 teens who used illegal drugs. For this study, the null hypothesis, Ho, is ______.

A. H

_{0}: p < 0.12B. H

_{0}: p > 0.12C. H

_{0}: p = 0.12**Explanation:**Because the DEA is interested in a change the test is not directional; it is a two-tailed test. The null hypothesis should be H

_{0}: p = 0.12.

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**User Contributed Comments**
1

User |
Comment |
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achu |
Read question, WITHOUT personal bias!!! :( Quesion only asks for change, not improvement! |