Question

The University of Michigan's business school claims it has the highest average GPA in the Big 10 among its business students. The business school claims that the business student average GPA is 3.5. Your friend believes that Michigan's claims are falsely inflated. In an effort to prove whether the grades are falsely inflated, your friend collects a random sample of 100 business students from Michigan and gets an average GPA of 3.31 with a standard deviation of 0.3.

	1.5.	Question 1.5 Interpret 'a 5% chance of a Type I error occurring' :
		A.  An alpha level of .05 means that 5% of the time, the null hypothesis is rejected when it is actually correct. B.  An alpha level of .05 means that 5% of the time, the null hypothesis is rejected when it is actually incorrect. C.  An alpha level of .05 means that 5% of the time, the null hypothesis is not rejected when it is actually correct. D.  An alpha level of .05 means that 5% of the time, the null hypothesis is not rejected when it is actually incorrect.

Answer 1

A. An alpha level of .05 means that 5% of the time, the null hypothesis is rejected when it is actually correct.

Type I errors are rejected when they are actually correct.