A financial analyst is interested in conducting an extensive study of credit card debt. He wants to
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A financial analyst is interested in conducting an extensive study of credit card debt. He wants to know whether the income of cardholders is related to the size of the debt. He compiles the data in the accompanying table. Determine whether size of debt and income level are independent. Use a 5 % level of significance.
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Income Less than $20,000 $20,000 - $40,000 Higher than $40,000 Size of debt $200 to $500 400 450 100 $500 to $1,000 200 500 200 $1,000 and above 100 300 500
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To determine whether the size of debt and income level are independent we can perform a chisquare test of independence This test is used to assess whe...View the full answer
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Related Book For
Statistics For Business And Financial Economics
ISBN: 9781461458975
3rd Edition
Authors: Cheng Few Lee , John C Lee , Alice C Lee
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