The Following Table Shows the Cross-Classification of Hedge Funds by Market

question 49

Essay

The following table shows the cross-classification of hedge funds by market capitalization (either small,mid,or large cap)and objective (either growth or value).
A)Set up the competing hypotheses to determine if market capitalization and objective are dependent.
B)Calculate the value of the test statistic and determine the degrees of freedom.
C)Compute the p-value.Does the evidence suggest market capitalization and objective are dependent at the 5% significance level?

• A)Set up the competing hypotheses to determine if market capitalization and objective are dependent.
• B)Calculate the value of the test statistic and determine the degrees of freedom.
• C)Compute the p-value.Does the evidence suggest market capitalization and objective are dependent at the 5% significance level?

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Definitions:

Short 150 Shares

The action of borrowing 150 shares of a stock with the aim of selling them in the hope that the stock price will decline, allowing for profit upon repurchasing the shares at a lower price.

Initial Margin

The portion of the purchase price that an investor must deposit when buying securities on margin, serving as a form of collateral.

Initial Investment

The amount of money used to start a business venture, acquire an asset, or invest in a financial product.

Short 100 Shares

The selling of 100 shares that are not currently owned, with the expectation of buying them back at a lower price for a profit.