An analyst is trying to determine whether the prices of certain stocks on the NA
ID: 3160004 • Letter: A
Question
An analyst is trying to determine whether the prices of certain stocks on the NASDAQ are independent of the industry to which they belong. She examines four industries and classifies the stock prices in these industries into one of three categories (high-priced, average-priced, low-priced). Choose the competing hypotheses to determine whether stock price depends on the industry. H_0: Stock price is dependent on the industry; Ha'. Stock price is independent of the industry. H_0: Stock price is independent of the industry; Ha. Stock price is dependent of the industry. Calculate the value of the test statistic. (Round intermediate calculations to 4 decimal places and your final answer to 2 decimal places.) Use Excel to calculate the p-value. (Round your answer to 4 decimal places.) At a 1.0% significance level, what can the analyst conclude? Reject H_0; the stock price is not dependent on the industry Reject H_0; the stock price is dependent on the industry Do not reject H_0; the stock price is dependent on the industry Do not reject H_0; the stock price is not dependent on the industryExplanation / Answer
a) Option b)
b) Perform chi-square test of association.
Compute Expected cell frequency for each cell.
fe=(row marginal*column marginal)/Total
p value at df=6 is 0.353
d) option d)
Obs Exp (Obs-Exp)^2/Exp 21 19.47[(69*57)/202] =0.1202(21-19.47)^2/19.47 12 15.37 0.7394 20 15.37 1.3938 16 18.79 0.4135 26 24.27 0.1237 18 19.16 0.2432 25 23.42 0.1072 10 13.26 0.8025 15 10.47 1.9597 8 10.47 0.5828 14 12.80 0.1131 6.669