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
Electronic Communications Networks: In traditional stock exchanges, the buying and selling of stocks take place at a physical location only and the members have to conduct tradi


R eceipt of bids and bid opening We discussed how to prepare the bids and to publish them in the earlier sub section. Now let us see how to receive and open bids. To receiv

How does the theory of comparative advantage relate to the currency swap market? Answer:  Name recognition is very important in the international bond market. With no it, even a

What are a bank's primary reserves ? When the Fed sets reserve requirements, what is its primary goal? Vault deposits and cash in the bank's account at the Fed are used to pe

knowledge of financial market is power discuss

Introduction of Financial Management Accounting has evolved and emerged within response to the social and economic needs of the society. The procedure of book keeping (mainten

STEPS IN BUDGETARY CONTROL 1. Quantification of plans in relation to sales, production, distribution and finance in terms of objectives and goals set by the management. That i

Calculation of Weighted Average Cost of Capital The calculation of weighted cost of capital involves the following steps: (i) Calculate the cost of each source of funds.

1: How will you inform your managers and supervisors about budgets, reporting requirements and financial delegations? 2: What mechanism you will implement to ensure that there a