5 Z Critical value and z-test

We have learned earlier that critical values play a vital role in statistical hypothesis testing and confidence interval construction. A critical value is a threshold that defines the boundary between the “fail to reject” and “rejection” regions in a statistical hypothesis test. It marks the point where a test statistic becomes statistically significant, allowing decision-makers to make decisions about rejecting or failing to reject the null hypothesis. In this section, we need to first learn how to calculate z critical values. For the purpose of this course, we will use Excel to do so.

Before we delve into the main question, it is crucial to understand how to use Excel to determine z critical values. This knowledge forms the foundation for conducting statistical tests effectively. Let us explore this concept, focusing on both one-tailed and two-tailed tests.