What you will learn
- Economic rationale
- Falsifiable hypothesis
- Decision relevance
- Scope and exclusions
Economic rationale
An economic rationale explains why a relationship might exist, including who could supply or demand the exposure. A plausible story motivates a test; it is not evidence that the result is present or exploitable.
Falsifiable hypothesis
A falsifiable hypothesis specifies a measurable claim and conditions that would contradict it. Avoid wording that can reinterpret every outcome as confirmation. Define the direction, horizon and comparison where relevant.
Decision relevance
Decision relevance connects the study to an actual choice, such as whether to continue researching a rule or reject an execution assumption. A statistically interesting pattern may not change any useful decision.
Scope and exclusions
Scope and exclusions tell the reader where the claim applies and where it does not. Identify instrument, data period, implementation assumptions and omitted cases before presenting the headline conclusion.
Worked example
A memo says the strategy works in the right conditions but never defines those conditions. The claim cannot be falsified because every loss can be labelled the wrong condition afterward.
Try it yourself
Rewrite that claim with an explicit sample, outcome measure and rejection criterion.
Show the worked solution
A testable statement names the eligible observations and net metric, then specifies what result would fail the hypothesis. The criterion must precede inspection rather than be chosen to fit the eventual outcome.
Apply this to your course project
Submit a concise research memo with evidence, assumptions and a rejection case.
Keep the calculation inputs, assumptions and decisions with your work. Practical exercises are self-reviewed; the scored knowledge checks assess the questions shown, not an independent certification of practical competence.