Hypothesis Testing Significance Level | CFA Level 1 Exam Preparation

Significance Level in Hypothesis Testing

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The significance level in hypothesis testing refers to the:

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A. B. C. D. E.

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Type I error refers to the event that we will reject the null when, in fact, it is true. The probability of this error is called the "significance level" of the test used to evaluate the hypothesis. Clearly, lower significance levels are better, all else equal.