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Still confused about this one. I guess it depends how you read that last line:
"Which of the following potential flaws is most likely to invalidate this study?"
If you read it as which flaw is most likely to be present, then I guess selection bias is most likely.
If you read it as which flaw, if present, is most likely to invalidate the study, then that type I error would be 100% likely to sink the results, guaranteed. Guess they meant the first one... Because yes p=0.01 so it's not likely they had a type 1 error.
Beef with this q.