What is Statistical power in FRM Part 1?

The probability of correctly rejecting a false null hypothesis, equal to one minus the Type II error probability. Power rises with effect size and sample size and generally falls when a stricter significance threshold is imposed.

Statistical power

FRM Part 1 glossary · Quantitative Analysis

Definition

The probability of correctly rejecting a false null hypothesis, equal to one minus the Type II error probability.

Statistical power in plain English

Power rises with effect size and sample size and generally falls when a stricter significance threshold is imposed.

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Backtesting
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Related FRM Part 1 terms

Bayes' theorem
Bootstrapping (term structure)
Central limit theorem
Copula
Exponentially weighted moving average (EWMA)
Generalized Autoregressive Conditional Heteroskedasticity (GARCH)
Heteroskedasticity
Monte Carlo simulation
Ordinary least squares (OLS)
p-value

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