There are a lot of ways to test for an hypothesis. There are known five steps of a test of hypothesis through the use of the critical value approach. They are;
- One has to Specify the Null Hypothesis.
- You have to also specify the Alternative Hypothesis.
- Then you set the Significance Level.
- Calculate the Test Statistic and Corresponding P-Value.
- Lastly, Draw a Conclusion.
<h3> The critical value approach?
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- This is known as a method that involves the determining of the "likelihood" or "unlikelihood" by knowing if or not the observed test statistic is said to be of a more extreme measure than would be expected if the null hypothesis were true.
It often uses the sample data and then there is an assumption if the null hypothesis is true before one can calculate the value of the test statistic.
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Answer:The agency problem is a conflict of interest inherent in any relationship where one party is expected to act in another's best interests. In corporate finance, the agency problem usually refers to a conflict of interest between a company's management and the company's stockholders.
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