Hello guys, I am really confused on this one, what is the rule to select a relation as the null hypothesis as compared to the alternative hypothesis? I am readin from schweser and in the examples i seem to think i find no relaion in how he chooses his null hypothis. it seems to be arbritary. In the notes it says the H altenative is the hoped for outcome. In the cfai book it says null is the one which is presumed to be true unles proves otherwise form test. BUt when i see examples in the schweser notes he doesn aply this rule al the time. anyone who has some clarity as to an easy rule or idea from which u can always selct the coorect relation is the null hypothesis. Thanks
provide a question here. and I can walk you through how I think through the problem, which might help. CP
CPK, oK I will give you two examples, that for me give contradictory results, Sheweser says> null is the one that the researcher wants to reject alternative is the one that the researcher wants to prove and somewhere it also says that it is the hoped for relation. Cfai book says> null is the one which is assumed to be true before unless the test proves it otherwise. First example is from shweser page 326. q1)annie is examining the earning of two differnt industries. aniie suspects that the earning of textile industry are more divergent then paper industry. detrmine if the earning of textile industry have greater standard deviation then those of paper industry. ( i have only given rlevent information which is necsaey for formulation the hypothesis and not the data for satndard deviation etc) q2)robert belives tht mean price of houses in the area is greater then 300000. the apropraite alternative hypothesis is?
q1: H0: variance Earnings Textile <= variance Earnings Paper. HA: variance Earnings Textile > Variance Earnings Paper q2: robert believes house avg prices is > 300000 so H0: mu <= 3000000 HA: mu > 3000000 Remember the Null hypothesis always has the = (equal to) sign. both what schweser and CFAI are saying is the same thing. read carefully Sheweser says> null is the one that the researcher wants to reject alternative is the one that the researcher wants to prove and somewhere it also says that it is the hoped for relation. If the Null hypothesis is rejected, the alternative hypothesis is proven. So the researcher WANTS to make sure he can reject the Null hyp. Cfai book says> null is the one which is assumed to be true before unless the test proves it otherwise. Until the Test proves the Alternative hypothesis, the Null is the true one. cp
hey thanks “Remember the Null hypothesis always has the = (equal to) sign.” was veryhelpful to pul u through even if u dn know wht is going on )
i i think i m clear abt it now