Explain Type I and Type 11 Errors, When They Are

question 12

Essay

Explain Type I and Type 11 errors, when they are risked, and what can be done to reduce their risks.

---

Definitions:

Semi-Annually

Occurring or calculated twice a year, often used in the context of interest payments or other financial assessments.

Face Value

The nominal or stated value of a bond, share of stock, or other financial instruments, typically used as a reference for calculating interest, dividends, or premiums.

Coupon Bond

A debt security that pays the holder a fixed interest rate (coupon) over the bond's life, with the principal amount repaid at maturity.

Market Interest Rates

The prevailing rate of interest available in the marketplace for securities, loans, and deposits, determined by supply and demand dynamics.