- CFA Exams
- CFA Exam: Level I 2021
- Study Session 3. Quantitative Methods (2)
- Reading 11. Hypothesis Testing
- Subject 1. Introduction

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**CFA Practice Question**

The reasoning for rejecting a null hypothesis is ______.

B. that a significant result seldom occurs when the null hypothesis is true

C. both A and B

A. that a significant result usually occurs when the null hypothesis is false

B. that a significant result seldom occurs when the null hypothesis is true

C. both A and B

Correct Answer: C

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**User Contributed Comments**
3

User |
Comment |
---|---|

leo6fin |
in the other words probability that null hypothesis will occur needs to be high for it not to be rejected. |

ashish100 |
the wording cannot get more confusing |

dbedford |
Reject the null when something interesting is happening. The null hypothesis assumes nothing new or interesting is happening. That's whys it's null because the assumption is that nothing is going on |