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Hypothesis Testing
Steps in Hypothesis Testing:
1 Stating the hypotheses.
2 Identifying the appropriate test statistic and its probability distribution.
3 Specifying the significance level.
4 Stating the decision rule.
5 Collecting the data and calculating the test statistic.
6 Making the statistical decision.
7 Making the economic or investment decision.
Hypothesis Tests Concerning the Mean:μrelying on the central limit theorem is
Hypothesis Tests Concerning Variance:test statistic 𝜒2.:[PracticeB.C.the variance of a single normally distributed population.
Type I and Type II Errors in Hypothesis Testing:all else equal.
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