It is common in business analytics to consider the possibility of categorical variables being independent or dependent. For example, is the age of a customer related to particular buying behaviors, such as the amount of a purchase? Chi-square is anon-parametrictest; that is, it does not have the limiting assumptions that many other test have, like ANOVA, z-test, and t-tests. Which of the following statements is true about the calculation of the chi-square statistic? (Select one statement)

Independence of categorical variables is more likely as the chi-square statistic becomes larger.

When the observed and expected frequencies of a chi-square analysis are equal, then we can reject the null hypothesis... Ho: the two categorical variables are independent.

The value of the chi-square statistic gets smaller as the observed and expected values get closer, and this will lead to a rejection of the null hypothesis in favor of the alternative hypothesis.

None of the above