5.3.2. Type II errors
The probability of falling to detect a variation while one is present depends on variation amplitude. The chances of missing a 1% annual underperformance after one year of analysis is instinctively greater than for a 10% annual underperformance. Results are reported in Table 1. Error probability is determined by the number of instances, in numerous runs over a year's time, where error is detected. For all levels of underperformance, the Type II error probability is less than 1%.