Chi square distribution, Financial Management

Assignment Help:

Chi Square Distribution

If the difference between actual and the expected frequencies is zero, the sampling distribution of the chi square statistic c2 will be identical to a continuous distribution curve called as Chi Square distribution. There will be a different Chi Square distribution for each of the degrees of freedom. (We look at degrees of freedom in the next section.) The area under the curve for each of the degrees of freedom is 1. If the number of degrees of freedom is small, the curve will be skewed to the right as shown in the figure. As the number of degrees of freedom increases, the curve also gradually tends to become symmetrical in nature.

Figure 1

715_chi square distribution.png

Since different degrees of freedom have different sampling distributions, it is difficult to have a table that would give us the areas under the curve for all possible values. The table given in the appendix gives us the areas in the right tail at the significance level which are most commonly used in tests.


Related Discussions:- Chi square distribution

What is the function of dividend policy decision, Q. What is the function o...

Q. What is the function of Dividend policy decision? Dividend policy decision: the third major decision of the financial management of the decision related to the dividend poli

Define which proposed capital budgeting projects to accept, For a specified...

For a specified IOS and MCC, how do financial managers decide that which proposed capital budgeting projects to accept, and which to reject? For a specified IOS and MCC, all inde

It better to buy shares of a company or its assets, It better to buy shares...

It better to buy shares of a company or its assets? The choice among buying shares of a company and buying its assets depends mostly on the fiscal differences and on the possib

Prepare a trend analysis for the balance sheet, • Prepare a Trend Analysis ...

• Prepare a Trend Analysis for the Balance Sheet, Income Statement and Cash Flow Statement • This should include about 12 accounts in the Balance Sheet and about 10 Income Statemen

Define flowcharts - documenting the accounting system, Flowcharts - Documen...

Flowcharts - Documenting the accounting system Depict in outline the sequence of events in a system showing document flow and department or function responsible for every ev

Define the concept of a real option, Define the concept of a real option. D...

Define the concept of a real option. Discuss some real options a firm can be confronted with when investing in real projects. A positive APV project is accepted under the supposi

Define cash management, Cash Management: - Cash management comprises mainta...

Cash Management: - Cash management comprises maintaining optimum cash balance and efficient collection and disbursement of cash. Methods or else Devices of Cash Management: - Th

Find out weighted average cost of capital, The Beta Corporation has an opti...

The Beta Corporation has an optimal debt ratio of 40%. Its cost of equity capital is 12% and its before-tax borrowing rate is 8%.  Given a marginal tax rate of 35%, calculate (

Healthcare Finance, I am trying to make a payment and I can''t seem to get ...

I am trying to make a payment and I can''t seem to get it to go throught on you all site..

Define condition for fixed-for-floating interest rate swap, What is the ess...

What is the essential condition for a fixed-for-floating interest rate swap to be possible? For a fixed-for-floating interest rate swap to be feasible it is essential for a quali

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd