If We Reject the Null Hypothesis When It's Really True

question 2

Multiple Choice

If we reject the null hypothesis when it's really true, we have made a

• A) correct decision.
• B) Type I error.
• C) Type II error.
• D) none of the above.

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Definitions:

Lost Sales

Revenue that a company could have earned but didn't, due to stockouts, inadequate capacity, or other factors.

Debt/Equity Ratio

An indicator of how the financing of company assets is divided between shareholder equity and debt.

All-Equity Firm

A company that finances its operations without any debt, relying solely on shareholder equity for funding.

Stock Price

The cost of purchasing a single share of a company, which fluctuates based on market conditions.