A,B,C,D,E,F,G,H,I,J,K

Question 1

Define a hypothesis

Answer 1

Ask:

Is pop. Parameter = > < (different) within Z or T expectation.

Question 2

Describe the steps of hypothesis testing.

Answer 2

1. ‘State the hypothesis:’ Come up w/ what you want to study first, then get data
2. ID the test stat, prob. distribs.
3. Specify the significance level
4. State the decision rule (Decision rule is within the range)
5. Collect the data and perform the calculations
6. Make the statistical decision
7. Make the economic or investment decision

Question 3

Describe and interpret the choice of null and alternative hypothesis.

Answer 3

Null - No difference: The hypothesis to be tested.

Alternative - Difference: The hypothesis that is accepted when the null is rejected.

Null v. Alt: Ex: Y1 v. Y2

H0: No diff. in returns
HA: Y1>Y2

Question 4

Distinguish one-tail and two-tail hypothesis tests.

Answer 4

Difference (tests any possibility) Two tailed

One-tailed (tests on possibility)

Question 5

Explain a test statistic

Answer 5

a single measure of some attribute of a sample (i.e. a statistic) used in statistical hypothesis testing.

Attribute - a characteristic of an object (person, thing, etc.)

While an attribute is often intuitive, the variable is the operationalized way in which the attribute is represented for further data processing

Question 6

Explain Type I and Type II errors

Answer 6

C

Question 7

Explain a significance level

Answer 7

C

Question 8

Explain how significance levels are used in hypothesis testing

Answer 8

.

Question 9

Explain a decision rules

Answer 9

D

Question 10

Explain the power of a test

Answer 10

D

Question 11

Explain the relation between confidence intervals and hypothesis tests

Answer 11

D

Question 12

Distinguish between a statistical result and an economically meaningful results

Answer 12

E

Question 13

Explain and interpret the p-value as it relates to hypothesis testing

Answer 13

F

Question 14

Identify the appropriate test statistic and interpret the results for a hypothesis test concerning the population mean of both large and small samples when the population is normally or approximately distributed and the variance is known or unknown.

Answer 14

G

Question 15

Identify the appropriate test statistic and interpret the results for a hypothesis test concerning the equality of the population means of two at least approximately normally distributed populations, based on independent random samples with equal or unequal assumed variances

Answer 15

H

Question 16

Identify the appropriate test statistic and interpret the results for a hypothesis test concerning the mean difference of two normally distributed populations

Answer 16

I

Question 17

Identify the appropriate test statistic and interpret the results for a hypothesis test concerning the variance of a normally distributed population, and the equality of the variances of two normally distributed populations based on two independent random samples.

Answer 17

J

Question 18

Distinguish between parametric and nonparametric tests and describe situations in which the use of nonparametric tests may be appropriate.

Answer 18

K