Type II error is defined as the probability of incorrectly rejecting the null hypothesis when in fact it does not apply to the entire population.
Type II error, in fact, is a false negative.
Type II error can be reduced by making the criteria for rejecting the null hypothesis more stringent, although this increases the chances of a false positive.
Sample size, true population size, and pre-set alpha level affect the amount of error risk.
Analysts need to weigh the likelihood and impact of Type II errors against Type I errors.
Performance Based Management (ABM) is a means of analyzing a company’s profitability by looking at every aspect of its business to determine its strengths and weaknesses.
A ballpark figure is a rough estimate of what something might mean in numerical terms when a more precise number is estimated, such as the cost of a product.
The binomial distribution is a probability distribution that generalizes the probability that a value will take on one of two independent values given a set of parameters or assumptions.
Share capital is the number of ordinary and preferred shares that the company has the right to issue and which are accounted for on the balance sheet as part of share capital.
The Central Limit Theorem (CLT) states that the distribution of sample means approaches a normal distribution as the sample size increases, regardless of the distribution of the population.