CFA Practice Question

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CFA Practice Question

Under the null hypothesis, H0, x = y. Under the alternative hypothesis, x does not equal y. If the critical z-statistic for the desired significance level is 1.68 and you find the z-statistic to be -3.2, you should ______.
A. accept the null hypothesis
B. reject the null hypothesis
C. fail to reject the null hypothesis
Explanation: Since the z-statistic is larger in magnitude than the critical value, you should reject the null hypothesis. Note that all the other alternatives loosely mean the same thing.

User Contributed Comments 1

User Comment
octavianus Since Ha refers to a two tailed test when does not equal is stated, critical z-value is 1.68 and -1.68.

Thus, -3.2 is in left rejection region.

Reject Ho
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