Chi square distribution, Financial Management

Assignment Help:

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.


Related Discussions:- Chi square distribution

Capm model and financial leverage beta , 1. Capital Asset Pricing Model an...

1. Capital Asset Pricing Model and Multinational Corporations Why do some critics say the CAPM model is not appropriate in an international setting? Please explain a way that

State about the nick leeson and barings, Nick Leeson and Barings Leeson...

Nick Leeson and Barings Leeson was the trader who managed to bring about the collapse of Barings Bank in 1995. The main reason he was able to do this was because there was a ce

What is the cash flows from financing activities, Cash flows from financing...

Cash flows from financing activities: Items included in this heading are: Cash receipts Cash payments Cash  receipts  from  iss

Conversion value, Conversion value is the amount which investors wi...

Conversion value is the amount which investors will receive by immediately exchanging the bonds for equity stock and selling the stock at prevailing market

Explain the benefits of benchmarking, Explain the Benefits of benchmarking ...

Explain the Benefits of benchmarking - Better understanding of business, competition and customers. - Improves business performance and discourages complacency. - Good wa

Determine the objectives of profit maximisation, Determine the objectives o...

Determine the objectives of Profit maximisation Profit maximisation remains one of the key objectives for the managers of the companysince many managers' compensations are lin

Regional banks, Regional Banks Large banks like First Norwest, Chicago,...

Regional Banks Large banks like First Norwest, Chicago, Mellon and Crocker function regionally at the national level in a fashion same to money center banks. Regional banks ser

What is control risk, What is Control risk That material misstatement c...

What is Control risk That material misstatement could take place and not be detected, or prevented on a timely basis, by accounting and internal control systems. All audits

Factors affecting working capital needs of firms, FACTORS AFFECTING WORKING...

FACTORS AFFECTING WORKING CAPITAL NEEDS OF FIRMS A large no. of reasons influences the working capital requirements of firms.  a number of them are as follows: 1. Nature of

Determine the limitations of the traditional approach, Determine the Limita...

Determine the Limitations of the traditional approach Limitations of the traditional approach were not entirely based on treatment or emphasis of different aspects. In other wo

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd