In a two-tailed test of a hypothesis

CFA Level I Quant
#1

In a two-tailed test of a hypothesis concerning whether a population mean is zero, Jack Olson computes a t-statistic of 2.7 based on a sample of 20 observations where the distribution is normal. If a 5% significance level is chosen, Olson should:

A) reject the null hypothesis and conclude that the population mean is not significantly different from zero. B) fail to reject the null hypothesis that the population mean is not significantly different from zero. C) reject the null hypothesis and conclude that the population mean is significantly different from zero.

#2

C is the only answer that makes sense, and it doesn’t depend on the infomation given in the question.

I hate questions such as this: the author is not nearly as clever as he thinks he is.

#3

HO: The mean is significantly different to zero

HA:The mean is not sgnificantly different to zero

since t-stat 2.7> 1.96 @ 5% significantly to different to zero

we reject the null and say it is not significantly different to zero. So A is the correct answer

#4

The null hypothesis _ always _ includes the equal sign: μ ≠ 0 is not an appropriate null hypothesis.

#5

I believe Magician is correct

#6

It happens sometimes.