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COMM 291 ASSIGNMENT 5 Fall 2014

Description

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Question

Question 3 Small Business (7 points)

The director of a small business development center located in a mid-sized city is reviewing data

about its clients. In particular, shes interested in examining if the distribution of business owners

across the various stages of business life cycle is the same for white-owned and visible-minorityowned businesses. The data are shown in the table below:

Planning

Starting

Managing

Getting Out

White-owned

Visible-minority-owned

11

9

14

11

20

2

15

1

a) Will you test goodness-of-fit or homogeneity (independence)? (.5 point)

b) Write the appropriate hypothesis. (.5 point)

c) Find the expected counts for each cell and explain why chi-square procedure are not

appropriate for this table. (1 point)

d) Create a new table by combining categories so that a chi-square procedure can be used. (1

point)

e) With this change in the table, what has happened to the degrees of freedom? (.5 point)

f) Test the hypothesis about the two groups and state the appropriate conclusion. (3.5 points)

Question 4 Seasonal spending (8 points)

Spending on credit cards decreases after the holiday spending season (as measured by amount

charged on a credit card in December). The data set in the file (Asst5_2014_Data.xlsx) contains

the monthly credit card charges of a random sample of 99 cardholders.

a) Check the conditions of a regression model for the dataset. (3.5 point)

b) Build a regression model to predict January spending from Decembers spending. (1 point)

c) How much, on average, will cardholders who charged \$2000 in December charge in

January? (.5 point)

d) Give a 95% confidence interval for the average January charges of cardholders who charged

\$2000 in December? (1.5 points)

e) From part d), give a 95% confidence interval for the average decrease in the charges of

cardholders who charged \$2000 in December? (1 point)

f) What reservations, if any, do you have about the confidence intervals you made in part d)

and e)? (.5 point)

Paper#52898 | Written in 10-Dec-2015

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