Hypothesis Testing

Question 1

What are the steps of any hypothesis test?

Answer 1

-Define variable
-State hypothesis
-Declare test
-State test statistic
-Compare to critical value/significance level
-Conclusion in context

Question 2

PMCC: What can the hypotheses be?

Answer 2

H⁰:rho=0
H¹:rho>/</≠0

Question 3

PMCC: What is the critical region?

Answer 3

The set of values that would be significant

Question 4

PMCC: How to conclude?

Answer 4

Insufficient to reject H⁰ when the test statistic is not more extreme than critical value
Sufficient when test statistic is more extreme

Question 5

SRCC?

Answer 5

Same as PMCC but with rho(s)

Question 6

What is significance level if not stated?

Answer 6

5%

Question 7

What are conditions for PMCC and SRCC tests?

Answer 7

Sample for variables random and independent