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7 Steps to Hypothesis Testing

June 11, 2012
  1. What are the null hypothesis and the alternative hypothesis?
  2. Which test statistic is appropriate and what is the probability distribution?
  3. What is the required level of significance?
  4. What is the decision rule?
  5. Based on the sample data, what is the value of the test statistic?
  6. Do we reject or fail to reject the null hypothesis?
  7. Based on previous decision, what is our investment or economic decision?

From → Quant

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