Westminster Financial has released a summary of Investor and investment package

Question

Westminster Financial has released a summary of Investor and investment package Information from the past fiscal year During this time. Westminster provided a choice among 12 pre-designed investment packages which it classified into three categories according to riskiness risky, moderate/mixed, and conservative Suppose that we're Interested in the possible relationship between the age of an investor and the riskiness of the investment package she chose The following contingency table gives a summary of the information released by Westminster regarding age and riskiness of Investment package for 150 investors in the cels of the table are the respective observed frequencies, and three of the cels also have blanks Fill in these blanks with the frequencies expected if the two variables riskiness of investment package chosen and age of investor are independent Round your responses to at least two decimal places

Explanation / Answer

Set up hypotheses as

H0: Riskiness of investment is independent of age

Ha: Riskiness of investment is not independent of age

Two tailed chi square test

Prepare contingency table assuming all means are equal as follows:

The chi-square statistic is 8.9471. The p-value is .062435. The result is not significant at p < .05.

Expected are shown adjacent to observed and next is shown chi square (0-e)^2/e

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Since p >0.05, we accept null hypothesis that the two are independent.

Results Risky Moderate Conservative Row Totals <35 8  (11.20)  [0.91] 20  (16.80)  [0.61] 7  (7.00)  [0.00] 35 35-49 18  (20.16)  [0.23] 27  (30.24)  [0.35] 18  (12.60)  [2.31] 63 >49 22  (16.64)  [1.73] 25  (24.96)  [0.00] 5  (10.40)  [2.80] 52 Column Totals 48 72 30 150  (Grand Total)

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