A real estate company is analyzing the selling prices of residential homes in a given community.140 homes that have been sold in the past month are randomly selected and their selling prices are recorded.The statistician working on the project has stated that in order to perform various statistical tests,the data must be distributed according to a normal distribution.In order to determine whether the selling prices of homes included in the random sample are normally distributed,the statistician divides the data into 6 classes of equal size and records the number of observations in each class.She then performs a chi-square goodness-of-fit test for normal distribution.The results are summarized in the following table. At a significance level of .05,what is the appropriate rejection point condition? A) Reject H₀ if χ² 12.5916 B) Reject H₀ if χ² 11.0705 C) Reject H₀ if χ² 9.3484 D) Reject H₀ if χ² 7.81473 E) Reject H₀ if χ² 9.48773

Question

A real estate company is analyzing the selling prices of residential homes in a given community.140 homes that have been sold in the past month are randomly selected and their selling prices are recorded.The statistician working on the project has stated that in order to perform various statistical tests,the data must be distributed according to a normal distribution.In order to determine whether the selling prices of homes included in the random sample are normally distributed,the statistician divides the data into 6 classes of equal size and records the number of observations in each class.She then performs a chi-square goodness-of-fit test for normal distribution.The results are summarized in the following table. At a significance level of .05,what is the appropriate rejection point condition? A) Reject H₀ if χ² > 12.5916 B) Reject H₀ if χ² > 11.0705 C) Reject H₀ if χ² > 9.3484 D) Reject H₀ if χ² > 7.81473 E) Reject H₀ if χ² > 9.48773

Quizplus · Accepted Answer

Based on the chi-square goodness-of-fit test results, the calculated chi-square value is 4.2. The degrees of freedom is 5-1=4 because there are 6 classes and estimating one parameter (mean) from the data. Using a significance level of .05, the appropriate rejection point condition is to reject H₀ if χ² > 7.81473 since this is the value from the chi-square distribution table with 4 degrees of freedom and a .05 level of significance. Therefore, the correct answer is D.

A Real Estate Company Is Analyzing the Selling Prices of Residential