Hypothesis Testing

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DEFINITION of 'Hypothesis Testing'

A process by which an analyst tests a statistical hypothesis. The methodology employed by the analyst depends on the nature of the data used, and the goals of the analysis. The goal is to either accept or reject the null hypothesis.

BREAKING DOWN 'Hypothesis Testing'

Hypothesis testing is used to infer a result of a hypothesis performed on sample data from a larger population. For example, performing a hypothesis test on sample data in an attempt to determine the mean of a population is the same as the mean of the sample.

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