Assume That a Chi-Square Test Was Conducted to Test the Goodness

question 17

Short Answer

Assume that a Chi-square test was conducted to test the goodness of fit to a 3:1 ratio and that a Chi-square value of 2.62 was obtained.Should the null hypothesis be accepted? How many degrees of freedom would be associated with this test of significance?

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Definitions:

Cheques Clear

The process by which a bank verifies the funds available in the account of the check issuer and transfers the specified amount to the recipient's account.

Miller-Orr Model

A financial management model that helps firms manage cash balances by setting upper and lower limits on cash reserves.

Optimal Upper Cash Limit

The optimal upper cash limit is the maximum amount of cash a company determines it should hold to efficiently manage transactions and emergencies while minimizing holding costs.

Standard Deviation

A statistical measure of the dispersion or variability in a set of values, often used in finance to quantify the risk of an investment's return.