Prerequisite Materials:
The Binomial Distribution/
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The Normal Distribution
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Hypothesis testing & the Binomial Distribution
- The null hypothesis, , is the hypothesis that you assume to be correct;
- The alternative hypothesis, , tells us about the parameter if your assumption is shown to be wrong;
- Hypothesis tests with alternative hypotheses in the form & are called one-tailed tests;
- Hypothesis tests with an alternative hypothesis in the form are called two-tailed tests;
- A critical region is a region of the probability distribution which, if the test statistic falls within it, would cause you to reject the null hypothesis;
- The critical value is the first value to fall inside of the critical region;
- The actual significance level of a hypothesis test is the probability of incorrectly rejecting the null hypothesis;
- For a two-tailed test the critical region is split at either end of the distribution;
- For a two-tailed test, either double the p-value for your observation, or halve the significance level at the end you are testing.
Hypothesis testing with the normal distribution
For a random sample of size n taken from a random variable , the sample mean, , is normally distributed with .
For the sample mean of a normally distributed random variable, , is a normally distributed random variable with .