T-Test

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DEFINITION of 'T-Test'

A statistical examination of two population means. A two-sample t-test examines whether two samples are different and is commonly used when the variances of two normal distributions are unknown and when an experiment uses a small sample size. For example, a t-test could be used to compare the average floor routine score of the U.S. women's Olympic gymnastic team to the average floor routine score of China's women's team.

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BREAKING DOWN 'T-Test'

The test statistic in the t-test is known as the t-statistic. The t-test looks at the t-statistic, t-distribution and degrees of freedom to determine a p value (probability) that can be used to determine whether the population means differ. The t-test is one of a number of hypothesis tests. To compare three or more variables, statisticians use an analysis of variance (ANOVA). If the sample size is large, they use a z-test. Other hypothesis tests include the chi-square test and f-test.

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RELATED FAQS
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    The common assumptions made when doing a t-test include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >>
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    The most common types of regression an investor can use are linear regressions and multiple linear regressions. Regressions ... Read Full Answer >>
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    Assets that have a negative correlation with each other reduce portfolio variance. Variance is one measure of the volatility ... Read Full Answer >>
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