Hi guys ! Need some help with quant… L1 quant seems so far in the past… In simple english… what does level of significance mean ? and what does Confidence interval mean ? Is there a relationship between the two ? Does a 5% level of significance imply a 95% confidence interval ? I know this is a trivial question but it will go a very long way in this L2 Quant : ) Thanks guys!!
What comes to mind: If you reject some null hypothesis at a significance level of 5%, then there’s still a 5% chance that you rejected it wrongly. A 95% confidence interval is an interval with a 95% chance of actually containing the value you are interested in.