CFA Practice Question

There are 434 practice questions for this study session.

CFA Practice Question

The significance level in hypothesis testing refers to the probability that we will ______.
A. reject the null when it is true
B. accept the alternative when it is true
C. fail to reject the null when it is false
Explanation: Note that the significance level is the same as the probability of making a Type I error. A Type I error refers to the event that we will reject the null when, in fact, it is true. Clearly, lower significance levels are better, all other factors being equal.

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