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False alarm rate of a small trial
You test whether a signal's hit rate is against , using independent trades, and reject when at least of them hit. What is the size of this test, the chance of rejecting when the hit rate really is ? Give a fraction.
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Hint
Under the null every sequence of results has the same chance.
Solution
- There are equally likely sequences.
- Exactly hits happen in sequences and exactly hits in .
- The size is .
Answer: