The Following Table Shows the Observed Frequencies of the Amount

question 23

Essay

The following table shows the observed frequencies of the amount of assets under management for a sample of 134 hedge funds.The table also contains the hypothesized proportion of each class assuming the amount of assets under management has a normal distribution.The sample mean and standard deviation are 15 billion and 11 billion respectively.
A)Set up the competing hypotheses for the goodness-of-fit test of normality for amount of assets under management.
B)Calculate the value of the test statistic and determine the degrees of freedom.
C)Specify the critical value at the 5% significance level.
D)Is there evidence to suggest the amount of assets under management do not have a normal distribution?
E)Are there any conditions which may not be satisfied?

• A)Set up the competing hypotheses for the goodness-of-fit test of normality for amount of assets under management.
• B)Calculate the value of the test statistic and determine the degrees of freedom.
• C)Specify the critical value at the 5% significance level.
• D)Is there evidence to suggest the amount of assets under management do not have a normal distribution?
• E)Are there any conditions which may not be satisfied?

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Definitions:

Consolidated Balance Sheet

A financial statement that aggregates the assets, liabilities, and equity of a parent company and its subsidiaries into one document.

Goodwill

An intangible asset that arises when a buyer acquires an existing business, representing the premium paid over the fair value of its net assets.

Proportionate Consolidation Method

An accounting technique used for combining the financial statements of joint ventures, where the investor's share of each line item is included proportionally.

Non-Controlling Interest (NCI)

A financial interest in a subsidiary attributed to shareholders outside of the controlling shareholder group, reflecting their share of the entity's equity that isn’t controlled by the parent company.