# kind of test

What kind of test is being used for the following hypothesis and what would a z-statistic of 1.68 tell us about a hypothesis with the appropriate test and a level of significance of 5%, respectively?

H0: B ≤ 0
HA: B > 0

A)

One-tailed test; fail to reject the null.

B)

One-tailed test; reject the null.

C)

Two-tailed test; fail to reject the null.

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Let’s see if I can get this one right for once.

It’s a one-tail test (you reject H0 only if the test statistic is too high, not if it is too low), so the entire 5% is in the right tail.  The critical z-value for 5% in the right tail is 1.645.  As 1.68 > 1.645, reject H0 in favor of Ha.

Simplify the complicated side; don't complify the simplicated side.

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absolute right.

Whew!

Simplify the complicated side; don't complify the simplicated side.

Financial Exam Help 123: The place to get help for the CFA® exams
http://financialexamhelp123.com/