CFA Practice Question

There are 985 practice questions for this topic.

CFA Practice Question

You have drawn a random sample of size n from a specified population and you test the hypothesis that MU = 50. Suppose that you are unable to reject the hypothesis. Your correct interpretation of the outcome is that ______.

A. in the population, MU = 50
B. probability is high that in the population, MU = 50
C. the sample data are not inconsistent with the hypothesis that in the population, MU = 50
Correct Answer: C

User Contributed Comments 13

User Comment
surob Why not all are correct?
ConorOG you can't say the population , MU = 50 without sampling the entire population.
bdaguy And just because MU=50 is a possible answer, it doesn't mean that it's a likely answer. Therefore, B is rejected.
apiccion Being unable to reject something does NOT mean that:
A) It is true.
B) There is a high or 'higher' probability that it's true.

For example, consider that I want to prove that there are no invisible pink unicorns. Then my null hypothesis is: "There are invisible pink unicorns". Obviously, any experiment I do will fail to disprove the null hypothesis. But clearly the notion that invisible pink unicorns exists is absurd.

This is similar to proving the existence of god. You can never disprove the existence of god, but being unable to prove the existence of something does not imply that it must exists.
bundy However apiccion there is proof of bad analogy
JakeZ lets not get into there guys :)
ybavly made me smile :)
agreed JakeZ
Boltz It is a Typo I Error, tonreduce the probabilities of error, the sample size n must be increase.
Shaan23 Bundy will be an interesting CFA. He actually might be ethical. that was funny
dellius there is no god
ashish100 bundy no one f**king knows so dont assume you know for sure.
ashish100 and Shaan23's definitely not gonna be ethical. "he actually might be ethical"
Go to a different industry and f things up over there. Ima call the SEC on you if I ever see you doing something sketchy
jgoff508 Wow, this escalated quickly. ^^^
You need to log in first to add your comment.