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\
|
e
e
f
f f
2
0
) (
is 9.0
**
.
Null hypothesis: Executives preferences vary from city to city (because thats what one would expect)
Alternative hypothesis: independent
The test statistic (TS) has a Chi-square distribution with 15 degrees of freedom .
So at 5% level significance one should reject the null hypothesis if TS > 27.488 or if TS < 6.262.
Since the observed value 9 falls in-between one should accept the null hypothesis at 5% level and conclude
that the preference is heterogeneous.
-
You may assume that the expected frequency calculation by Mr. Hogle is correct
**
You may assume that the computation of the test statistic is correct.
Page 3 of 4
Question 2) Let t
d
( t
m
) be the proportion of all executives in Delhi (Mumbai) whose first preference
for Business magazines is BFT. Find a 95% confidence interval for t
d
- t
m
.
[5 points]
Answer given by Mr. Hogle: From the expected frequency table of the survey data, we get the point
estimates: p
d
= 21/200 =0.105 and p
m
= 17.5/200 = 0.0875;
so p
d
- p
m
= 0.105 0.0875 = 0.0175
Table value (o=0.05) = 1.645 [this is from the z-table; since sd is unknown, we should be using t-
distribution with 199 d.f, but effectively thats same as looking up the z-table]
The actual standard error (SE) is:
200
) 1 (
200
) 1 (
m m d d
t t t t
+