After the collapse of the stock market in October 1987, Business Week polled its readers and asked whether they expected another big drop in the market during the next 12 months.12 The data table for this question has two variables. One indicates whether the reader owns stock and the other gives the anticipated chance for another drop.
(a) Find the contingency table defined by stock ownership and the anticipated chances for a big drop in the market. Include the marginal distributions.
(b) Did stockholders think that a drop was either somewhat likely or very likely?
(c) Did non stockholders think that a drop was either somewhat likely or very likely?
(d) Do the differences between parts (b) and (c) make sense? Do these differences imply that the two variables summarized in the table are associated?