Statistics: Z-test: Testing hypotheses – #59


Question: Consider the results of a small opinion poll concerning the chances of another stock market crash in the next 12 months comparable to the crash of 1987.

Responses to the opinion poll on the chances of a stock marker crash
Stockholders Non-stockholders Total
Very likely 18 26 44
Somewhat likely 41 65 106
Not very likely 52 68 120
Not likely at all 19 31 50
Not sure 8 13 21
Total 138 203 341

a. Fill in the “Total” row and column.

b. Find the table of overall percentages. Interpret these as estimates of probabilities in the population. In particular, what probabilities do they represent?

c. Find the table of percentages by type of person (stockholder/non-stockholder). Interpret these as estimates of probabilities in the population. In particular, what probabilities do they represent?

d. Find the table of percentages by response. Interpret these as estimates of probabilities in the population. In particular, what probabilities do they represent?

e. Does the response appear to be independent of the stockholder/non-stockholder classification?

f. Find the critical value from the chi-squared table for the 5% level and report the result of the chi-squared test.

g. Find the critical value from the chi-squared table for the 1% level and report the result of the chi-squared test.

h. Find the critical value from the chi-squared table for the 0.1% level and report the result of the chi-squared test.

i. State you conclusions and discuss the results in practical terms.

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