Groundlearn / Glossary / Type I error
Type I error
Also called false positive, alpha error. A CFA and FRM term, defined in plain English with the distinction examiners test.
What it means
Rejecting a true null hypothesis. Its probability is the significance level, α.
The exam angle
Type I and Type II trade off against each other at a fixed sample size. Only more data improves both.
Where it appears in the syllabus
- Quantitative MethodsCFA Level I · exam weight 11–14% · Returns and benchmarks, time value, distributions, portfolio maths, regression.
- Quantitative AnalysisFRM Part I · exam weight 20% · Probability, hypothesis testing, regression, time series, volatility, simulation.
Related terms
- Arithmetic meanThe sum of the observations divided by their number.
- BootstrapResampling the observed data with replacement to estimate the sampling distribution of a statistic, without assuming a…
- Central limit theoremFor a large enough sample, the distribution of the sample mean approaches normal regardless of the shape of the…
- Coefficient of determinationThe fraction of the dependent variable’s variation explained by the regression.
- Confidence intervalA range that will contain the true parameter in a stated proportion of repeated samples.
- Continuous compoundingCompounding over infinitely small intervals.
Educational content only. This is not financial, investment, legal or regulatory advice. Check the official curriculum for your own exam before relying on any definition here.
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