I am struggling with the following question:
A test is constructed to see if a coin is biased. It is tossed 10 times and if there are 10 heads, 9 heads, 1 head or 0 heads, it is declared to be biased. Can 20 be the significance level of this test?
My thinking is as follows:
Let X be the number of heads, under , XB(10,0.5).
If we look at a table of values, we get:
Since it is declared biased for these values, P<0.1 or P>0.9. Therefore, shouldn’t we be able to use 20% as the significance level, yet my book says we can’t. Any clarification?