Chi square distribution, Financial Management

Chi Square Distribution

If the difference between actual and the expected frequencies is zero, the sampling distribution of the chi square statistic c2 will be identical to a continuous distribution curve called as Chi Square distribution. There will be a different Chi Square distribution for each of the degrees of freedom. (We look at degrees of freedom in the next section.) The area under the curve for each of the degrees of freedom is 1. If the number of degrees of freedom is small, the curve will be skewed to the right as shown in the figure. As the number of degrees of freedom increases, the curve also gradually tends to become symmetrical in nature.

Figure 1

715_chi square distribution.png

Since different degrees of freedom have different sampling distributions, it is difficult to have a table that would give us the areas under the curve for all possible values. The table given in the appendix gives us the areas in the right tail at the significance level which are most commonly used in tests.

Posted Date: 9/15/2012 6:00:32 AM | Location : United States







Related Discussions:- Chi square distribution, Assignment Help, Ask Question on Chi square distribution, Get Answer, Expert's Help, Chi square distribution Discussions

Write discussion on Chi square distribution
Your posts are moderated
Related Questions
What is the most conservative type of working capital financing plan a company could implement?  Explain. An all equity capital structure would be mainly conservative type of wor

North Star Company, a U.S. based MNC, is considering to establish a subsidiary to capitalize on the removal of Eastern European border restrictions. The subsidiary would manufactur

Par tnership A legally authorized business form in which two or more partners are co-owners, sharing profits, losses, and liabilities related with the business they own.

you just started your first job, and you want to buy a house within 3 years. you are currently saving for the down payment. you plan to save $5,000 the first year. You also anticip

Criticize the flexible exchange rate regime from the viewpoint of the proponents of the fixed exchange rate regime. If exchange rates are fluctuating very frequently, that may

Callable bonds give the right to the issuer to redeem the bond prior to its maturity date, at a specified call price. These bonds are beneficial to the

What are "free cash flows?" Free cash flows signify the total cash flows from business operations that are available to be distributed to the suppliers of a firm's capital each

Q. Describe the Functions of Controller? (1) Planning and budgeting: - It comprises capital expenditure planning, profit planning, budgeting, inventory control, sales forecasti

The Final Project for this module is a consultancy report to Anthony’s Orchard, an expanding apple orchard and distributor. The company has been entertaining the idea of expanding

Q. What is Installment Credit? This is another method by which the assets are purchased and the possession of goods is taken immediately but the payment is made in installments