Type I Error Definition | CFA Level 1 Exam Preparation

Type I Error

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Question

Type I error refers to the event that we will:

Answers

A. Accept the alternative when it is true.

B. none of these answers.

C. Reject the null when it is true.

D. Fail to reject the null when it is false.

E. Reject the alternative when it is true. C

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Explanations

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A. B. C. D. E.

Explanation

Remember that the null hypothesis is the one that you maintain to be true unless there is sufficient evidence to prove otherwise. Therefore, the first type of mistake that can happen is that you reject the maintained hypothesis when in fact, it is true. This error is referred to as "Type I" error. On the other hand, you may not have sufficient evidence to disprove the null when in fact, it is false. This failure to appropriately reject the null is referred to as "Type II" error.

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