Choose and Explain a Classical Hypothesis Test
Company: Point72
Role: Quantitative Researcher
Category: Statistics & Math
Difficulty: medium
Interview Round: Technical Screen
# Choose and Explain a Classical Hypothesis Test
Explain null and alternative hypotheses, significance level, p-value, Type I error, and Type II error. Then compare when a z-test, t-test, chi-square test, and F-test is appropriate. For each test, name the parameter or relationship being tested, its assumptions, and what a statistically significant result does and does not establish.
### Constraints & Assumptions
- Use frequentist definitions for this question.
- Distinguish a test statistic's reference distribution from the observed data distribution.
- Address independence and distributional assumptions rather than selecting from sample size alone.
- Do not interpret a p-value as the probability that the null hypothesis is true.
### Clarifying Questions to Ask
- Is the outcome continuous, categorical, or a variance estimate?
- Are samples paired, independent, or grouped?
- Are normality and equal-variance assumptions plausible, and is the variance known?
```hint Start from the estimand
Choose the test only after naming whether the target is a mean, proportion, independence relationship, or variance ratio.
```
```hint State the reference world
A p-value measures how extreme the statistic is under the null model and its assumptions.
```
### What a Strong Answer Covers
- Precise definitions and the relationship between alpha and Type I error under the null.
- Power and Type II error as functions of effect size, variability, sample size, and test design.
- Correct use cases and assumptions for all four named test families.
- Interpretation that separates statistical significance, effect size, and practical importance.
### Follow-up Questions
- How would multiple testing change the decision threshold?
- What would you report alongside a p-value to communicate magnitude and uncertainty?
Overview: Explain null and alternative hypotheses, significance level, p-value, Type I error, and Type II error. Explain the assumptions and derivation clearly, check edge cases, and show how the result changes when those assumptions no longer hold.
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