Suppose that, on the basis of a sample, we want to test the hypothesis that the mean

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Suppose that, on the basis of a sample, we want to test the hypothesis that the mean debt-to- total-assets ratio of companies that become takeover targets is the same as the mean debt-to-total-assets ratio of companies in the same industry that do not become takeover targets. Explain under what conditions we would commit a Type I error and under what conditions we would commit a Type II error.
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Quantitative Investment Analysis

ISBN: 978-1119104223

3rd edition

Authors: Richard A. DeFusco, Dennis W. McLeavey, Jerald E. Pinto, David E. Runkle

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