When Deciding the Null and Alternative Hypotheses, the Rule of Thumb

question 51

True/False

When deciding the null and alternative hypotheses, the rule of thumb is that if the claim contains the equality (e.g., at least, at most, no different from, etc.), the claim becomes the null hypothesis. If the claim does not contain the equality (e.g., less than, more than, different from), the claim is the alternative hypothesis.

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Definitions:

Equivalent Financial Position

A state in which two or more financial scenarios provide the same economic value or utility to an investor or individual.

Focal Date

A specific date used as a reference point for calculations in financial transactions, especially in annuities and other periodic payments.

Maturity Value

The amount payable to an investor at the end of a fixed term investment, including the principal and any accrued interest.

Simple Interest Rate

The interest rate applied to the principal amount only, without compounding over a period.