# 7 Steps to Hypothesis Testing

- What are the null hypothesis and the alternative hypothesis?
- Which test statistic is appropriate and what is the probability distribution?
- What is the required level of significance?
- What is the decision rule?
- Based on the sample data, what is the value of the test statistic?
- Do we reject or fail to reject the null hypothesis?
- Based on previous decision, what is our investment or economic decision?

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