Statistics - Hypothesis Testing Exam
2025 Questions and Answers
hypothesis testing - ANSWER✔✔-The statistical assessment of a statement or idea
regarding a population. LOS11.a
hypothesis testing procedure - ANSWER✔✔-1. state the hypothesis
2. select the appropriate test statistic
3. specify the level of significance
4. state the decision rule regarding the hypothesis
5. collect the sample and calculate the sample statistics
6. make a decision regarding the hypothesis
7. make a decision based on the results of the test
LOS11.a
null hypothesis - ANSWER✔✔-H0, the hypothesis that the researcher wants to reject.
LOS11.a
alternative hypothesis - ANSWER✔✔-Ha, is what is concluded if there is sufficient
evidence to reject the null hypothesis. LOS11.a
one-tailed test - ANSWER✔✔-one-sided test.
ex. researcher wants to test to see if stock options return is greater than zero.
LOS11.a
two-tailed test - ANSWER✔✔-two-sided test.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
, ex. researcher wants to test to see if the return on options is simply different from zero.
LOS11.a
critical values - ANSWER✔✔-used in two-tailed test. rejection points.
LOS11.a
decision (rejection) rule - ANSWER✔✔-Reject Ho if: test statistic > upper critical value
or test statistic < lower critical value. LOS11.a
test statistic - ANSWER✔✔-The difference between the sample statistic and the
hypothesized value, scaled by the standard error of the sample statistic.
test statistic = (sample stat. - hypothesized value)/standard error
LOS11.b
type I error - ANSWER✔✔-The rejection of the null hypothesis when it is actually true.
LOS11.b
type II error - ANSWER✔✔-the failure to reject the null hypothesis when it is actually
false. LOS11.b
significance level - ANSWER✔✔-the probability of making a type I error (rejecting null
when its true). Designated by α. LOS11.b
decision rule - ANSWER✔✔-The decision rule for rejecting or failing to reject the null
hypothesis is based on the distribution of the test statistic. LOS11.c
power of a test - ANSWER✔✔-The probability of correctly rejecting the null hypothesis
when it is false. One minus the probability of making a Type II error.
1 - P(Type II Error)
LOS11.c
p-value - ANSWER✔✔-Probability of obtaining a test statistic that would lead to a
rejection of the null hypothesis, assuming the null hypothesis is true. The smallest level
of significance for which the null hypothesis can be rejected. LOS11.e
t-test - ANSWER✔✔-Widely used hypothesis test that employs a test statistic that is
distributed according to a t-distribution.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 2
2025 Questions and Answers
hypothesis testing - ANSWER✔✔-The statistical assessment of a statement or idea
regarding a population. LOS11.a
hypothesis testing procedure - ANSWER✔✔-1. state the hypothesis
2. select the appropriate test statistic
3. specify the level of significance
4. state the decision rule regarding the hypothesis
5. collect the sample and calculate the sample statistics
6. make a decision regarding the hypothesis
7. make a decision based on the results of the test
LOS11.a
null hypothesis - ANSWER✔✔-H0, the hypothesis that the researcher wants to reject.
LOS11.a
alternative hypothesis - ANSWER✔✔-Ha, is what is concluded if there is sufficient
evidence to reject the null hypothesis. LOS11.a
one-tailed test - ANSWER✔✔-one-sided test.
ex. researcher wants to test to see if stock options return is greater than zero.
LOS11.a
two-tailed test - ANSWER✔✔-two-sided test.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
, ex. researcher wants to test to see if the return on options is simply different from zero.
LOS11.a
critical values - ANSWER✔✔-used in two-tailed test. rejection points.
LOS11.a
decision (rejection) rule - ANSWER✔✔-Reject Ho if: test statistic > upper critical value
or test statistic < lower critical value. LOS11.a
test statistic - ANSWER✔✔-The difference between the sample statistic and the
hypothesized value, scaled by the standard error of the sample statistic.
test statistic = (sample stat. - hypothesized value)/standard error
LOS11.b
type I error - ANSWER✔✔-The rejection of the null hypothesis when it is actually true.
LOS11.b
type II error - ANSWER✔✔-the failure to reject the null hypothesis when it is actually
false. LOS11.b
significance level - ANSWER✔✔-the probability of making a type I error (rejecting null
when its true). Designated by α. LOS11.b
decision rule - ANSWER✔✔-The decision rule for rejecting or failing to reject the null
hypothesis is based on the distribution of the test statistic. LOS11.c
power of a test - ANSWER✔✔-The probability of correctly rejecting the null hypothesis
when it is false. One minus the probability of making a Type II error.
1 - P(Type II Error)
LOS11.c
p-value - ANSWER✔✔-Probability of obtaining a test statistic that would lead to a
rejection of the null hypothesis, assuming the null hypothesis is true. The smallest level
of significance for which the null hypothesis can be rejected. LOS11.e
t-test - ANSWER✔✔-Widely used hypothesis test that employs a test statistic that is
distributed according to a t-distribution.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 2
