CFA Practice Question

CFA Practice Question

Which of the following is (are) true?

I. Type I error is the event in which we reject the null when it is false.
II. Type II error occurs when we fail to reject the null when it is false
III. Type I error occurs if we fail to reject the alternative when it is false.
IV. Type II error is the event where we reject the alternative when it is true.
A. II only
B. II, III & IV
C. I, II & IV
Explanation: Type I error is the event in which we reject the null when it is true. This is the same as failing to reject the alternative when it is false.

Type II error is the event in which we fail to reject the null when it is false. This is the same as rejecting the alternative when it is true.

User Contributed Comments 7

User Comment
chenchow Good tricky question!
jackwez definately one to slow down on...
prigopou Note you cannot use accept to replace fail to reject. Accepting is not a condition in hypothesis testing.. you simply reject or fail to reject.. accepting implies that it is true. hypothesis testing isn't trying to prove something is true.
andrewmorgan exactly, and you dont reject the alternative, you only reject or fail to reject the null!
catsong Exactly!
mary11 I even looked at my notes for this one and still got it wrong.
kristen91 agree with prigopou, this is stat 101 stuff
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