Given below are two statements. In the light of the above statements, choose the correct answer from the options given below.
Statement I:The risk of rejecting the null hypothesis when it should not be rejected is greater at the 0.05 p-level than at the 0.01 p-level.
Statement II:The risk of committing a Type I error is lower at the 0.05 p-level than at the 0.01 p-level.
ABoth Statement I and Statement II are true
BBoth Statement I and Statement II are false
CStatement I is true but Statement II is false ✓ Correct
DStatement I is false but Statement II is true
Correct answer: (C) Statement I is true but Statement II is false
Explanation
At the 0.05 level the null is rejected more readily than at the strict 0.01 level.
Statement 1 is true because a looser cutoff raises wrongful rejection risk.
Type I error means rejecting a null hypothesis that is actually correct.
Statement 2 is false since Type I risk is higher, not lower, at 0.05.
A smaller alpha such as 0.01 makes false positives less likely.
The chosen significance level equals the maximum tolerated Type I error rate.
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