A Type II Error Is Committed When

question 82

Multiple Choice

A Type II error is committed when

• A)a true alternative hypothesis is mistakenly rejected
• B)a true null hypothesis is mistakenly rejected
• C)the sample size has been too small
• D)not enough information has been available

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Definitions:

Variance of Returns

A statistical measurement of the dispersion or spread of a set of investment returns, used to understand investment risk.

Positively Correlated

A relationship between two variables where they move in the same direction, meaning that as one variable increases, the other variable also increases, and vice versa.

Complete Information

A scenario in which all parties have access to all relevant information related to a transaction or decision.

Real Rate of Return

The real rate of return is the annual percentage profit earned on an investment, adjusted for changes in the price level due to inflation or deflation.