DEFINITION of 'PTest'
A statistical method used to test one or more hypotheses within a population or a proportion within a population. When testing a hypothesis about a population proportion (p) within a large population (one in which the sample size, "n", is not greater than 5% of the overall population), the formula is:
x = (m/nP) / SqRt[P(1P)/n]
m= "yes" response
n = random sample size
p = proportion
P = population
This formula is used to test three hypotheses:
 p ≤ P
 p ≥ P
 p = P
The ptest statistic typically follows a standard normal distribution when large sample sizes are used, and researchers use Ztests to determine whether a hypothesis passes based on a specific significance level will be rejected. The larger the pvalue in the ptest, the more likely the hypothesis is true.
INVESTOPEDIA EXPLAINS 'PTest'
For example, a polling group contacted a group of investors and asked if they felt that the economy would fall into a recession. Of the 1000 people contacted, 700 said that they thought that the economy was heading toward recession. The researchers then applied the PTest to determine if p ≤ 0.60, p ≥ 0.60, or p = 0.60; basically, what percentage of the population believe that the economy will fall into a recession.

TTest
A statistical examination of two population means. A twosample ... 
Representative Sample
A subset of a statistical population that accurately reflects ... 
ZTest
A statistical test used to determine whether two population means ... 
Statistical Significance
A result that is not likely to occur randomly, but rather is ... 
Probability Distribution
A statistical function that describes all the possible values ... 
Statistically Significant
The likelihood that a result or relationship is caused by something ...

What's a good forex strategy to use when spotting a Wedgeshaped Pattern?
Use wedgeshaped patterns to identify bullish or bearish price action when trading currencies in the foreign exchange (forex) ... Read Full Answer >> 
What is a "linear" exposure in Value at Risk (VaR) calculation?
A linear exposure in the valueatrisk, or VaR, calculation is represented by positions in stocks, bonds, commodities or ... Read Full Answer >> 
What is the criteria for a simple random sample?
Simple random sampling is the most basic form of sampling and can be a component of more precise, more complex sampling methods. ... Read Full Answer >> 
How do I perform a financial analysis using Excel?
Investors can use Excel to run technical calculations or produce fundamental accounting ratios. Corporations use Excel to ... Read Full Answer >> 
What are some examples of ways that sensitivity analysis can be used?
Sensitivity analysis is an analysis method that is used to identify how much variations in the input values for a given variable ... Read Full Answer >> 
How is the 8020 rule (Pareto's Principle) used in macroeconomics?
The 8020 rule was first used in macroeconomics to describe the distribution of wealth in Italy in the early 20th century, ... Read Full Answer >>

Investing Basics
Economic Indicators That DoItYourself Investors Should Know
Understanding these investing tools will put the market in your hands. 
Fundamental Analysis
Find The Right Fit With Probability Distributions
Discover a few of the most popular probability distributions and how to calculate them. 
Forex Education
Trading With Gaussian Models Of Statistics
The entire study of statistics originated from Gauss and allowed us to understand markets, prices and probabilities, among other applications. 
Active Trading Fundamentals
Bet Smarter With The Monte Carlo Simulation
This technique can reduce uncertainty in estimating future outcomes. 
Fundamental Analysis
Scenario Analysis Provides Glimpse Of Portfolio Potential
This statistical method estimates how far a stock might fall in a worstcase scenario. 
Investing
The Strong Dollar’s (Real) Toll On Tech Stocks
A large portion of U.S. technology companies’ sales occur overseas, given the strong international business and consumer demand from many U.S. tech firms. 
Fundamental Analysis
How to Calculate a Coverage Ratio
In broad terms, the higher the coverage ratio, the better the ability of the enterprise to fulfill its obligations to its lenders. 
Technical Indicators
Will These HighFlying Stocks Stay Hot in 2015?
These 10 stocks were on fire in 2014. Will they stay hot? 
Chart Advisor
These REITs Are Looking Good Right Now
These REITs are in strong uptrends and looking to go higher. 
Chart Advisor
Commodity Traders are Watching These 3 Charts
As we head towards the summer months, many commodity traders are looking to diversify their holdings and to protect themselves against inflation.