In a one-tailed test of X2 how do you compare the critical value with the test statistical?
Example: Fund Alpha has been in existence for 20 months, during this period the standard deviation of monthly returns has been 5%. You want to test a claim by the fund manager that the standard deviation of monthly return is less than 6%? The critical value or rejection point given is a 0.05 level of significance.
Answer: X2 = 13.19 and Rejection point based on df and significance = 0.05 is 10.1 and answers says, “since the test statistic is higher than the rejection point we can NOT reject H0.
But I am confused as per my understanding since the critical point is less than the X2, H0 should be rejected! Could anyone please help me to understand?
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