bodhisattva

H0 = Manager Adds No Value (he sucks)
HA = Manager Adds Positive Value (he's good)

Type I Error: Rejecting H0 when it is actually true.

Layman's terms: Investor may think that the manager adds value, when in fact, he sucks.


Type II Error: Failing to Reject H0 (AKA agreeing with H0) when it is actually false.

Layman's terms: Investor may think that the manager sucks, when in fact, he provided good value.