Simple hypothesis (d) Composite hypothesis MCQ 13.4

Surprisingly, our simple null hypothesis is enough to explain this track record. I don’t have any flair for picking stocks successfully, but there is a simple randomised strategy I can follow to allow me to run an investment fund which predictably gets a track record like this. My strategy to match this is to simply go to a casino, bet 90% of my cash on a 50-50 chance and then put the proceeds in a market index fund. At this point, I’ll either have 190% of my initial funds or 10% of them. Every four years, I take the money out of the index fund for a day and make a similar double-or-nothing bet on 90% of the money. How far would we expect this process to get before crashing? On average, I’d get one near-doubling before the crash – and this is all LTCM got.

the distinction between simple hypotheses and composite ..

A simple null hypothesis against a composite alternative

Hypothesis Testing, simple against composite

N2 - In recent years several authors have recommended smooth tests for testing goodness of fit. However, the number of components in the smooth test statistic should be chosen well; otherwise, considerable loss of power may occur. Schwarz's selection rule provides one such good choice. Earlier results on simple null hypotheses are extended here to composite hypotheses, which tend to be of more practical interest. For general composite hypotheses, consistency of the data-driven smooth tests holds at essentially any alternative. Monte Carlo experiments on testing exponentiality and normality show that the data-driven version of Neyman's test compares well to other, even specialized, tests over a wide range of alternatives.

Statistical hypothesis testing - Wikipedia

AB - In recent years several authors have recommended smooth tests for testing goodness of fit. However, the number of components in the smooth test statistic should be chosen well; otherwise, considerable loss of power may occur. Schwarz's selection rule provides one such good choice. Earlier results on simple null hypotheses are extended here to composite hypotheses, which tend to be of more practical interest. For general composite hypotheses, consistency of the data-driven smooth tests holds at essentially any alternative. Monte Carlo experiments on testing exponentiality and normality show that the data-driven version of Neyman's test compares well to other, even specialized, tests over a wide range of alternatives.

Title: Empirical phi-divergence test statistics for testing simple and composite null hypotheses
The different types of null hypothesis are as follows: Simple hypothesis: ..

Hi: Symbol for alternative hypothesis

A general term for the procedure of assessing whether sample data is consistent or otherwise with statements made about the population. See also null hypothesis, alternative hypothesis, composite hypothesis, significance test, significance level, type I and type II error.

A simple hypothesis specifies the distribution completely; whereas a composite hypothesis does not. By posting your answer, you …

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Fortunately, it is very easy to put the question of out-performance into a scientific form. We have some data (the fund’s track record), a hypothesis (that the fund systematically outperforms the market), and methods to explore this relationship. The basic tool is to compare our hypothesis to a . In this case we can make the null hypothesis a simple assertion that in the long run the fund performs at a market average produced by random chance – hardly the stuff to stir the imagination of a potential investor.

- Simple hypothesis is expressed in the form of equalities - Composite hypothesis is expressed in the form of ..

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