If the Null Hypothesis Is Rejected at the 5% Level

question 25

Multiple Choice

If the null hypothesis is rejected at the 5% level of significance, it _____ at the 1% level.

• A) will always be rejected
• B) will always not be rejected
• C) will never be tested
• D) may be rejected or not rejected

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Definitions:

Wealth

The total value of all financial and non-financial assets owned by an individual or entity, minus any debts owed.

Diminishing Marginal Utility

A principle stating that as a person increases consumption of a product, there is a decline in the added satisfaction that comes from consuming one additional unit.

Risk-Averse

Describes investors or consumers who prioritize minimizing the risk of loss over potentially achieving higher returns.

Firm-Specific Risk

Risk associated with an individual company, which can include management decisions, product demand, and sector challenges.