CFA Practice Question

There are 434 practice questions for this study session.

CFA Practice Question

The meaning of "testing the hypothesis μ <= 6 versus μ > 6 at a 5% significance level" is ______

A. if the population mean μ is > 6, the probability of deciding wrongly is at least 95%.
B. if the population mean μ is <= 6, the probability of deciding wrongly is at most 5%.
C. if the population mean μ is > 6, the probability of deciding wrongly is at most 5%.
Correct Answer: B

User Contributed Comments 5

User Comment
dcfa Type I Error=level of significance=probability of rejecting null hypothesis when it is true
bidisha H0= u>6 , h1 = u<= 6
Seancfa1 Bidisha...?
enetis u<=6 at 5% significance implies that prob u>6 is 95%
dbedford We are basically saying "If we accept the research hypothesis that the population average is less than or equal to 6, then there is a 5% chance we'll be wrong
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