CFA CFA Level 1 Question of the Week: Level 1 – Quantitative Methods

Question of the Week: Level 1 – Quantitative Methods

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    • Avatar of MarkMeldrumMarkMeldrum
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        When we do not reject a true null, we:

        • A. commit a Type 1 error.
        • B. commit a Type 2 error.
        • C. make the correct decision.
      • Avatar of mincemeat23mincemeat23
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          These questions always make my head spin.

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          Here you go:

        • Avatar of MarkMeldrumMarkMeldrum
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            The correct answer is Option C.

            There are four possible outcomes when we test a null hypothesis:

            • We reject a false null hypothesis.  This is a correct decision.
            • We reject a true null hypothesis.  This is called a Type I error.
            • We do not reject a false null hypothesis.  This is called a Type II error.
            • We do not reject a true null hypothesis.  This is a correct decision.
          • Avatar of mincemeat23mincemeat23
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              Oh that’s right – I’ve seen that before somewhere!

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