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8 October, 10:29

Choose the correct definition of significance level from the list below

A significance level is

a. the probability of failing to reject the null hypothesis when the alternative hypothesis is true.

b. the minimum acceptable chance of making a type I error.

c. the probability that an event occurred as a result of a causative factor rather than by chance.

d. the smallest level of significance at which the null hypothesis would be rejected.

e. the probability of rejecting the null hypothesis when it is indeed false.

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  1. 8 October, 11:31
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    Option B) the minimum acceptable chance of making a type I error.

    Step-by-step explanation:

    We define significance level as:

    It is denoted by α. It is the probability of rejecting the null hypothesis when it is true. Thus, it is the type I error. Lower significance levels indicate that stronger evidence are required to reject the null hypothesis. We compare the significance level to the p-value to decide whether to accept or reject the null hypothesis. It is the probability of false positive. The probability of making a type I error is α, which is the level of significance. For example: A significance level of 0.05 indicates that there is a 5% chance that we are wrong when we reject the null hypothesis because it is actually true. To lower this risk, you must use a lower value for α.

    Option B) the minimum acceptable chance of making a type I error.
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