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5 out of 100 tests just at 5% level would just be statistically significant solely by chance.

Define the term significance level?

  • The likelihood that an event may have happened by chance is the significance level of such an event (including a statistical test).
  • The likelihood of rejecting that null hypothesis when it is true, or the alpha level, is used in statistical tests to evaluate statistical significance.
  • The significance level, or alpha, for this example is set at 0.05 (5%).

If somehow the null hypothesis became correct, we can anticipate that the extreme dates that occur only by chance would happen just 5% of the time.

Determine 5% of 100.

= 100(5%)

= 100(0.05)

= 5

As a result, we anticipate that 5 out of 100 tests just at 5% level would just be statistically significant solely by chance.

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