Which of the following must be used as the level of significance if we want a higher possibility of correct decision?

Question

A. 5%

B. 15%

C. 1%

D. 10%

Answer 1

C) 1%

"correct" in the sense that there is less chance of rejecting a true null hypothesis

but you also run a greater risk of not rejecting a false null hypothesis.

With 1% level of significance, you're not rejecting a null hypothesis unless the data is over 3 standard deviations from the mean. Scientists will often use the "6 sigma" test, and not reject unless the data shows more than 6 standard deviations from the mean.