Choose the Statement That Best Describes the Power of a Test

question 12

Multiple Choice

Choose the statement that best describes the power of a test.

• A)The power of a test is the probability that the null hypothesis will be accepted when it is true.
• B)The power of a test is the probability that the alternative hypothesis will be rejected when it is false.
• C)The power of a test is the probability that the null hypothesis will be rejected when it is false.
• D)None of these statements describes the power of a test.

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Definitions:

Profit Margin

A financial metric that measures the amount of net income earned with each dollar of sales generated by comparing the profit and the revenue.

P/E Ratio

Price to Earnings (P/E) ratio is a valuation metric that compares the price of a stock to its per-share earnings, indicating how much investors are willing to pay per dollar of earnings.

Earnings Per Share

A company's profit divided by the number of outstanding shares of its common stock.

Equity Multiplier

A financial leverage ratio that indicates the portion of a company’s assets that are financed by stockholder's equity, calculated by dividing total assets by total shareholders' equity.