Question

Question 4 – Undergraduate Degree and MBA Major (3 parts, 14 marks)

The MBA program was experiencing problems scheduling its courses. The demand for the

program’s optional courses and majors was quite variable from one year to the next. In one

year, students seem to want marketing courses; in other years, accounting or finance are the

rage. In desperation, the dean of the business school turned to a Statistics professor for

assistance. The Statistics professor believed that the problem may be the variability in the

academic background of the students and that the undergraduate degree affects the choice

of major. As a start, he took a random sample of last year’s MBA students and recorded the

undergraduate degree and the major selected in the graduate program. The undergraduate

degrees were BA (=1), BEng (=2), BBA (=3), and several others (=4). There are three possible

majors for the MBA students: Accounting (=1), Finance (=2), and Marketing (=3). Can the

Statistics professor conclude that the undergraduate degree affects the choice of major?

a) [2 Marks] Create a cross-classified (or contingency) table with undergraduate degree as

the row and MBA major as the column. The data in this table should be deemed as

observed counts.

b) [3 Marks] Create another table with the corresponding expected counts and having row

totals, column totals, and grand total. Round each cell value to two decimal places.

c) [9 Marks] Perform a chi-square test to assess the association (or independence) between

an undergraduate degree and choice of MBA major at 5% level of significance. Verify the

assumptions required for the chi-square test of independence. Make sure you follow all

the steps for hypothesis testing indicated in the Instructions section and show your

computations.

Answer 1