Quant two last question 28 p-value

[john.ophof]

Why is a p-value of 0.04 means we can reject H0 at 6%.
p-value is prob of obtaining a critical value that would lead to a rejection of H0. But why 6%?

 

[David Harper CFA FRM]

Hi John,

Because the p-value is the *lowest* signficance where we can reject the null. Given p of 4%, we cannot reject null at 3% but we could reject at 5% or 6% etc
I personally find it easier to convert to confidence; i.e., p value of 4% = 96% confident. As in,
"Okay, I can reject the null with 96% confidence"
But the p value is right on the edge of the envelope, therefore:
"I cannot reject with higher confidence; e.g., cannot reject with 97%"
But "I certainly could reject will less confidence; e.g., if i can reject safely with 96% than surely i can do with less confidence too"

David