Alpha Risk

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August 31, 2024 4 min read Definitions

Alpha Risk: Risk of Concluding that a Misstatement Exists When It Does Not

Statistics Finance Auditing Alpha Risk Type I Error Hypothesis Testing Statistical Errors Decision Making

Alpha Risk, also known as Type I error, represents the risk of incorrectly concluding that there is a misstatement when in reality there is none. This concept is critical in hypothesis testing, financial audits, and decision-making processes.

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