If a Theory's Prediction Is Tested and Is in Conflict

question 24

Multiple Choice

If a theory's prediction is tested and is in conflict with the evidence,

• A)the original data and assumptions should be discarded.
• B)it is rejected with certainty,because it is not possible to reject a hypothesis that is actually true.
• C)the statistical tolerance of risk for accepting a false hypothesis should be increased.
• D)inquiry into the matter should cease.
• E)a new hypothesis is usually suggested and tested.

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Definitions:

Default Risk

The possibility that a borrower will fail to pay back a loan or meet contractual obligations.

Government of Canada Bond

A debt security issued by the Canadian government to support government spending.

Maturity Date

The specified date on which the final payment of a loan, bond, or other financial instrument must be paid in full.

Par Value

The face value of a bond or stock, as stated by the issuing company.