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Simulating a Trading Hypothesis

HardA/B Testing & Experimentation00:00
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Your question is Simulating a Trading Hypothesis. Take a moment with it on the right.

Talk me through your thinking if you like. When you're confident, submit your answer and I'll grade it like a real screen (7/10 or better passes).

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Problem

Design a simulation to test a simple trading hypothesis.

State the hypothesis, define the primary outcome and risk guardrails, choose the randomization and analysis units, and simulate results under both the null and alternative hypotheses. Explain how you would determine sample size, avoid biased conclusions from repeated checking, and decide whether the strategy should be adopted. Your answer should distinguish statistical significance from economic significance and discuss dependence caused by shared market conditions.