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Hypothesis Testing

13 lessons0%

Lessons

What is Hypothesis Testing

Test Statistic, Type I and type II Errors, and Significance Level

Decision Rule in Hypothesis Testing

p-Value in Hypothesis Testing

Selecting the Appropriate Test Statistic

Hypothesis Testing with t-statistic

Hypothesis Testing with z-statistic

Tests Concerning Differences in Means

Paired Comparision Tests - Mean Differences When Populations are Not Independent

Hypothesis Tests Concerning Variances

Chi-square Test – Test for value of a single population variance

F-test - Test for the Differences Between Two Population Variances

Non-parametric Tests

Quizzes

Lesson 8 of 13

Quiz

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Hypothesis Testing with z-statistic

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Paired Comparision Tests - Mean Differences When Populations are Not Independent

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Tests Concerning Differences in Means | Finance Train

Tests Concerning Differences in Means

Sometimes we want to test if the mean values differ between two populations. We can assume that the two populations are normally distributed and that the samples are drawn independently.

We can combine observations from both samples to get a pooled estimate of the unknown population variance.

The hypothesis can be formed as follows:

H0: µ1 - µ2 = 0 versus HA: µ1 - µ2 ≠ 0
H0: µ1 - µ2 ≤ 0 versus HA: µ1 - µ2 > 0
H0: µ1 - µ2 ≥ 0 versus HA: µ1 - µ2 < 0

Test Your Knowledge

Hypothesis Testing with z-statistic

Paired Comparision Tests - Mean Differences When Populations are Not Independent

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Tests Concerning Differences in Means

Case 1: Normally distributed populations, population variances unknown, but assumed to be equal

Case 2: Normally distributed populations, population variances unequal and unknown