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).
Growth Value
Large Cap. 30 19
Mid cap 12 10
Small cap 18 72
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 1% significance
level?
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