CFA Practice Question

There are 434 practice questions for this study session.

CFA Practice Question

For the hypothesis test below where the decision is fail to reject H0, a Type II error could have been committed. A correct discussion of the error would involve ______.

A. going along with the population mean as more than 90 when in fact the population mean is 90 or less.
B. concluding that the population mean is 90 or less when in fact the population mean is less than 90.
C. going along with the population mean as 90 or less when in fact the population mean is greater than 90.
D. concluding that the population mean is 90 or more when in fact the population mean is less than 90.
Correct Answer: C

A Type II error is failing to reject H0 when H0 is in fact false. In terms of this problem, this would mean going along with the population mean as 90 or less (failing to reject [H0: μ < 90] when in fact the mean is more than 90 [H0: μ < 90] is false).

User Contributed Comments 7

User Comment
Aimy what is the difference between answer B and C?
Gina wording: you can only draw a conclusion when you reject Ho.
xiong type II - going along, Type I- conclude
fding I think the difference is at "in fact", which means "truth" --- B = in fact u < 90 whereas C = in fact u > 90
JKiro Aimy: "...when a null hypothesis is not rejected, no conclusion is drawn..." --- hence with the type II error, the experimenter is "...going along..."
thekid I agree with Jkiro's explanation.

However, for this particular question:
'B' is DEFINITELY wrong aside from term 'concluding' because it says "...in fact the population mean is LESS than 90." which is not true.

If it had stated "...in fact the population mean is GREATER than 90."
Then the term 'concluding' would differentiate it from the correct answer 'C'.

If someone could confirm, it would be appreciated.
johntan1979 Yup, nothing to do with going along or concluding at all. Keywords are at the end of the sentences.
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