Arrange the following procedures of testing hypotheses in proper sequence:

A. Making decisions
B. Setting a test criterion
C. Set up hypothesis
D. Set up suitable significance level
E. Doing computations

Choose the correct answer from the options given below:

Correct option is A

The proper sequence of hypothesis testing steps is:

1. C. Set up Hypothesis:
   The process begins by defining the null hypothesis (H₀) and the alternative hypothesis (H₁) to specify the assumptions to be tested.

2. D. Set up Suitable Significance Level:
   The level of significance ($\alpha$) is determined, typically 0.05 or 0.01, to decide the threshold for rejecting the null hypothesis.

3. B. Setting a Test Criterion:
   The appropriate statistical test (e.g., z-test, t-test, chi-square test) is chosen, and its critical value or p-value is identified.

4. E. Doing Computations:
   Perform the necessary computations using sample data to calculate the test statistic or p-value.

5. A. Making Decisions:
   Based on the computed test statistic or p-value and the significance level, decide whether to reject or fail to reject the null hypothesis.

Thus, the correct sequence is C, D, B, E, A.

Information Booster:

Hypothesis Testing Process:

1. Null Hypothesis (H₀): Assumes no effect or no difference.
2. Alternative Hypothesis (H₁): Contradicts H₀ and states the effect/difference exists.
3. Significance Level ($\alpha$): The probability of rejecting a true null hypothesis, typically set at 5% (0.05).
4. Critical Region: The range of values where H₀ is rejected.
5. Test Statistic: A numerical summary (e.g., z, t) used for testing the hypothesis.
6. Decision Rule: Compare test statistic with the critical value or compare p-value with $\alpha$.

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