- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 8. Hypothesis Testing
- Subject 6. The Decision Rule

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**CFA Practice Question**

Under the null hypothesis, H

_{0}, 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.

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**User Contributed Comments**
1

User |
Comment |
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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 |