An analyst is trying to determine whether the prices of certain stocks on the NASDAQ are independent of the industry to which they belong. She examines four industries and classifies the stock prices in these industries into one of three categories (high-priced, average-priced, low riced).

a. Specify the competing hypotheses to determine whether stock price depends on the industry.
b. Calculate the value of the test statistic. Approximate the p-value with the table or calculate its exact value with Excel.
c. At a 1% significance level, what can the analystconclude?

  • CreatedJanuary 28, 2015
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