In a hypothesis test, the probability of making the wrong decision when the null hypothesis is true is called
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → significance level
Rejecting the null hypothesis \( H_{0} \) when it is true is a Type I error. The probability of a Type I error is fixed in advance and is called the level of significance, α (commonly 5% or 1%).
Why the other options are incorrect
Option (1) Confidence level — Incorrect. The confidence level is 1 − α, the probability of the right decision (not rejecting a true \( H_{0} \)).
Option (2) Confidence interval — Incorrect. A confidence interval is a range of values for a parameter, not a probability of error.
Option (4) standard error — Incorrect. The standard error is the standard deviation of a sample statistic, not a probability.