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Even when choosing a probability level of 95%, there is always a 5% chance that one rejects the null hypothesis when it was actually correct. This is called Type I error, represented by the Greek letter ?. It is possible to err in the opposite way if one fails to reject the null hypothesis when it is, in fact, incorrect...
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This is called Type II error, represented by the Greek letter ?. These two errors are represented in the following chart.
Figure 1. Types of error
Type of decision H0 true H0 false
Reject H0 Type I error (?) Correct decision (1-?)
Accept H0 Correct decision (1-?) Type II error (?)
Steps in Hypothesis Testing
1
Identify the null hypothesis H0 and the alternate hypothesis HA...
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