Type II Error
A statistical term used within the context of hypothesis testing that describes the error that occurs when one accepts a null hypothesis that is actually false. The error rejects the alternative hypothesis, even though it does not occur due to chance. Investopedia Says:
A type II error accepts the null hypothesis, although the alternative hypothesis is the true state of nature. It confirms an idea that should have been rejected, claiming that two observances are the same, even though they are different.
An example of a type II error would be a pregnancy test that gives a negative result, even though the woman is in fact pregnant. In this example, the null hypothesis would be that the woman is not pregnant, and the alternative hypothesis is that she is pregnant. Related Terms:
Mean
Monte Carlo Simulation
Null Hypothesis
Standard Deviation
Statistics
Type I Error |