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

Question of the Week: Level 1 – Quantitative Methods

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    • MarkMeldrum
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      Which set of hypotheses is incorrectly formulated?

      • H0: θ < θ0 versus Ha: θ > θ0
      • H0: θ ≥ θ0 versus Ha: θ < θ0
      • H0: θ ≤ θ0 versus Ha: θ > θ0
    • MarkMeldrum
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      Option A is incorrectly stated since the appropriate formulation should be:  H0: θ ≤ θ0 versus Ha: θ >θ0.

      We state the null and alternative hypotheses such that they account for all possible values of the parameter.

      Option A does not account for the condition that θ = θ0.

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