Sample Data - CFA® Level 1 Exam | Test Prep

What is z? | CFA® Level 1 Exam | Test Prep

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Question

What do we call the value called z that is computed using sample data?

Answers

Explanations

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A. B. C. D.

B

The z-values are statistics generated to provide a measure of testing the hypothesis.

The correct answer to the question is B. Test statistic.

A test statistic is a value computed using sample data that is used to make an inference or decision about a population parameter. In statistical hypothesis testing, we often compare the test statistic to a critical value to determine whether to reject or fail to reject a null hypothesis.

Here's a more detailed explanation of each option:

A. Decision rule: A decision rule is a predefined criterion used to make a decision in hypothesis testing. It specifies the conditions under which the null hypothesis should be rejected or failed to be rejected based on the observed test statistic. While decision rules are related to test statistics, they are not the value computed using sample data itself.

B. Test statistic: A test statistic is a numerical summary of sample data that is used to assess the evidence against a null hypothesis. It quantifies the discrepancy between the observed data and what is expected under the null hypothesis. The choice of test statistic depends on the specific hypothesis being tested and the nature of the data. Common examples of test statistics include t-statistics, F-statistics, and chi-square statistics. The test statistic is typically compared to a critical value or a p-value to determine the statistical significance of the results.

C. Parameter: A parameter is a numerical summary of a population. It is a fixed and unknown value that describes the characteristics of the entire population. Parameters are typically estimated using sample data, and the resulting estimates are called statistics. While parameters are important in statistical analysis, the question specifically asks about the value computed using sample data, which refers to a test statistic.

D. None of these answers: This option is incorrect because the value computed using sample data does have a specific name in statistics, which is the test statistic.

In summary, the value computed using sample data is referred to as the test statistic. It plays a crucial role in hypothesis testing, where it is compared to critical values or p-values to determine the statistical significance of the results.