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Author: Bill Campbell
Hypothesis Testing
There are eight articles on hypothesis testing: Synopsis Step 1: State the hypotheses Step 2: Select the appropriate test statistic Step 3: Specify the level of significance Step 4: State the decision rule for testing the null hypothesis Step 5: Collect the sample data and calculate the value of the test statistic Step 6: Make…
Hypothesis Testing – Synopsis
Hypothesis testing is essentially just an application of confidence intervals: we construct a confidence interval for a particular value, then compute a test statistic and check whether or not it lies in the confidence interval, then do something with that information. There are several steps to hypotheses testing, but in a nutshell it’s just checking…
Hypothesis Testing – Step 7: Make a (Business) Decision Based on the Results of the Test
There are eight articles on hypothesis testing: Synopsis Step 1: State the hypotheses Step 2: Select the appropriate test statistic Step 3: Specify the level of significance Step 4: State the decision rule for testing the null hypothesis Step 5: Collect the sample data and calculate the value of the test statistic Step 6: Make…
Hypothesis Testing – Step 6: Make a Decision Regarding the Null and Alternative Hypotheses
There are eight articles on hypothesis testing: Synopsis Step 1: State the hypotheses Step 2: Select the appropriate test statistic Step 3: Specify the level of significance Step 4: State the decision rule for testing the null hypothesis Step 5: Collect the sample data and calculate the value of the test statistic Step 6: Make…
Hypothesis Testing – Step 5: Collect the Sample Data and Calculate the Value of the Test Statistic
There are eight articles on hypothesis testing: Synopsis Step 1: State the hypotheses Step 2: Select the appropriate test statistic Step 3: Specify the level of significance Step 4: State the decision rule for testing the null hypothesis Step 5: Collect the sample data and calculate the value of the test statistic (you are here)…
Hypothesis Testing – Step 4: State the Decision Rule for Testing the Null Hypothesis
There are eight articles on hypothesis testing: Synopsis Step 1: State the hypotheses Step 2: Select the appropriate test statistic Step 3: Specify the level of significance Step 4: State the decision rule for testing the null hypothesis (you are here) Step 5: Collect the sample data and calculate the value of the test statistic…
Currency Exchange: Forward Discount/Premium
Suppose that the spot exchange rate between USD and GBP is USD/GBP 1.5814; i.e., USD 1.5814 = GBP 1.0. If the 1-year forward exchange rate is USD/GBP 1.5660 (so USD 1.5660 = GBP 1.0), then we say that the GBP is trading at a (one-year) forward discount (versus the USD): the forward price for GBP…
Answering a Constructed Response (Essay) Question: Allocating Your Time
This will be a very short article. When you are allocating your time to answering a constructed response (i.e., essay, morning session) question, follow this simple rule: ⅔ – ¾ of your time should be spent thinking about your answer ¼ – ⅓ of your time should be spent writing your answer. Suppose that the question asks…
Essay (Constructed Response) Questions: What’s the Point?
A recent session with one of my tutoring candidates brought to mind an interesting idea that is more than worthy of an article of its own: What’s the point? When you are writing an answer to an AM (constructed response, essay) question, you should ask yourself one simple question: What’s the point of my answer?…
Hypothesis Testing – Step 3: Specify the Level of Significance
There are eight articles on hypothesis testing: Synopsis Step 1: State the hypotheses Step 2: Select the appropriate test statistic Step 3: Specify the level of significance (you are here) Step 4: State the decision rule for testing the null hypothesis Step 5: Collect the sample data and calculate the value of the test statistic…