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CFA Level 1
Quantitative Methods

Hypothesis Testing with P-value

Easy Hypothesis Testing P-values And Significance

In a recent study, a financial analyst is testing whether the average return of a new investment strategy differs from the average return of the market portfolio. The null hypothesis ($H_0$) states that there is no difference in returns ($ar{x} = ar{eta}$). After conducting the hypothesis test, the analyst obtains a p-value of 0.03.

Based on this p-value, determine whether the analyst can reject the null hypothesis at a significance level of 0.05.

Hint

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