Finquinz mock errors!? Statistic, type I and type 2 error

[tickersu]

@danvalia

Alpha is called the chosen (or selected) significance level of a test. The level of significance is commonly between 1% or 10% but can be any value depending on your desired level of confidence or need to reduce Type I error. Selecting 5% signifies that there is a 5% chance that the observed variation is not actually the truth.

It is important to distinguish the chosen significance level, alpha, from an observed significance level that accompanies a test (p-value). It’s a minor detail, but it can cause confusion.