Overview
Suppose that for data taken from a Normal distribution with unknown mean M and known standard deviation 1, we hypothesize that H0: M=0 versus H1: M != 0. Suppose that we conduct a hypothesis test at the 0.05 significance level and with sample size N=100.
1) Calculate the probability of a Type I error if the true value of M is 0.
2) Calculate the probability of a Type I error if the true value of M is 1.