To see whether silicon chip sales are independent of where the XYZ country's economy is in the business cycle, data have been collected on the weekly sales of ABC firm, and on whether the economy was rising to a cycle peak, at a cycle peak, falling to a cycle trough, or at a cycle trough. The results are given in the table below. State the null and alternative hypotheses. Calculate the appropriate test statistic and conduct the test of hypothesis at 0.01 level of WEEKLY CHIP SALES Total Economy High Medium 14 Low At Peak 39 12 64 At Trough 58 78 58 195 68 Rising Falling 39 16 14 58 16 18 92 Total 195 123 101 419
Compound Probability
Compound probability can be defined as the probability of the two events which are independent. It can be defined as the multiplication of the probability of two events that are not dependent.
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Probability theory is a branch of mathematics that deals with the subject of probability. Although there are many different concepts of probability, probability theory expresses the definition mathematically through a series of axioms. Usually, these axioms express probability in terms of a probability space, which assigns a measure with values ranging from 0 to 1 to a set of outcomes known as the sample space. An event is a subset of these outcomes that is described.
Conditional Probability
By definition, the term probability is expressed as a part of mathematics where the chance of an event that may either occur or not is evaluated and expressed in numerical terms. The range of the value within which probability can be expressed is between 0 and 1. The higher the chance of an event occurring, the closer is its value to be 1. If the probability of an event is 1, it means that the event will happen under all considered circumstances. Similarly, if the probability is exactly 0, then no matter the situation, the event will never occur.
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