Question

According to an independent insurance agent, the following is a breakdown of the amount of life insurance purchased by males in the following age groups. The agent is interested in whether the age of the male and the amount of life insurance purchased are independent events. Conduct a test for independence at the 5% level.

Age of Males	None	$50,000 – $100,000	$100,001 – $150,000	$150,001 – $200,000	$200,000+
20 – 29	45	15	40	0	5
30 – 39	40	0	25	15	10
40 – 49	15	0	35	0	30
50+	40	30	10	15	10

A. What are the degrees of freedom?

B. State the distribution to use for the test.

C. What is the test statistic? (Round your answer to two decimal places.)

D. What is the p-value? (Round your answer to four decimal places.)

E. Alpha:
α =

Answer 1

The statistical software output for this problem is :

Degrees of freedom = 12

Chi square

Test statistics = 145.33

P-value = 0.0000

alpha = 0.05