How do you Calculate a P-Value?

I don’t remember reading how to actually calculate it in Schweser.

not important. they would give it to you, and u have to interpret it.

just to jog my memory - if the given P value is less than the significance level, then it’s significant i.e. a good thing, right?

yep , that’s what i remember too, need to refresh quant… been a while. but I’m finding that with each subject touched - everything’s brand new, and I do not remember a thing. (And I am pretty sure it’s going to be like that a month from today).

P-Value = smallest level for which null can be rejected. The only reason I asked the question is that I just got back to back questions from QBank asking to calculate the P-Value

can u give those question ids? (if you have them)

Figure it out form the PDF given the signifiance level.

by PDF - you mean probability distribution function and not Adobe PDf right? in most cases that is not provided - so I am not sure this is relevant.


p value is smallest probability at which you can reject the null. and how do you reject null? if absolutely value of t-stat > tcritical, then reject. but the t-critical is determined from looking up the probabilities densities relevant to the t-distribution. Now let’s say t-stat = 3.5 and t-critcal at 5% significance is 2.5. In this case you reject null easily. But if you were to raise the t-cricital such that it was 3.4999999999 then also you’d be able to reject it. so then to find out the p-value, you have to look at the area corresponding to 3.49999 value. and the probability associated with that are is your p-value. I guess this also implies that if you are rejecting null at x% level, then p-value will always be smaller than x%.

P value always given in CFA n econemetric software. T test is just standardizing the standard error given the distribution (usually student t) with the degrees of freedom. Pvalue is just another way of calculating the same thing. Just remember you want a very small pvalue the better the independant variable. PDF yes probablity density distribution.

Question ID#: 86531 Question ID#: 86535