If a Researcher Rejects the Null Hypothesis When the Null

question 137

Multiple Choice

If a researcher rejects the null hypothesis when the null hypothesis is in fact true, the researcher has:

• A) made a Type II error.
• B) made a Type I error.
• C) made an illusory correlation.
• D) fallen prey to the confirmation bias.

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Definitions:

Portfolio

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Index Model

A statistical model to estimate the returns of a stock based on the returns of a broader market index.

Covariance

A measure of the degree to which two variables move together. In finance, it is used to measure how returns on two assets are related.

Regression Analysis

A statistical method used to examine the relationship between one dependent variable and one or more independent variables.