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CFA Level 1
Quantitative Methods

Understanding P-values and Significance Levels

Very Easy Hypothesis Testing P-values And Significance

In hypothesis testing, the p-value is a critical measure used to determine the significance of the test results. It helps researchers decide whether to reject the null hypothesis. For a given significance level (alpha), the p-value indicates the probability of obtaining a test statistic as extreme as, or more extreme than, the one observed, under the assumption that the null hypothesis is true.

What does a p-value of 0.03 imply when performing a hypothesis test?

Hint

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