FRM-hypothesis testing
Finance Junkie
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FRM-hypothesis testing

Postby » Thu Mar 14, 2013 3:15 pm

If the null hypothesis is innocence, then the statement “It is better that the guilty go free, than the innocent are punished” is an example of preferring a:

A) type I error over a type II error.
B) two tailed test over a one tailed test.
C) higher level of significance.
D) type II error over a type I error.

Finance Junkie
Posts: 356
Joined: Wed Apr 11, 2012 11:26 am

FRM-hypothesis testing

Postby content.pristine » Thu Mar 14, 2013 7:26 pm

The answer here is A.
The judicial system would rather let a guilty guy free, than arrest an innocent.
Taking an innocent man to jail is a type II error. Letting a guilty guy go free is a type I error.

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