Question

An analyst is trying to determine whether the prices of certain stocks on the NASDAQ are independent of the industry to which they belong. She examines four industries and, within each industry, categorizes each stock according to its price (high-priced, average-priced, low-priced).

	Industry
Stock Price	I	II	III	IV
High	16	8	10	14
Average	18	16	10	12
Low	7	8	4	9

a. Choose the competing hypotheses to determine whether stock price depends on the industry.

• H₀: Stock price is independent of the industry.; H_A: Stock price is dependent of the industry.

• H₀: Stock price is dependent on the industry.; H_A: Stock price is independent of the industry.

b-1. Calculate the value of the test statistic. (Round intermediate calculations to at least 4 decimal places and final answer to 3 decimal places.)

b-2. Find the p-value.

• p-value < 0.01

• 0.01 ≤ p-value < 0.025

• 0.025 ≤ p-value < 0.05

• 0.05 ≤ p-value < 0.10

• p-value ≥ 0.10

c. At a 1% significance level, what can the analyst conclude?

• Reject H₀; there is not enough evidence to support the claim that the stock price is dependent on the industry.

• Reject H₀; there is enough evidence to support the claim that the stock price is dependent on the industry.

• Do not reject H₀; there is not enough evidence to support the claim that the stock price is dependent on the industry.

• Do not reject H₀; there is enough evidence to support the claim that the stock price is dependent on the industry.

Answer 1