A STUDY OF CONTINGENCY TABLES & MARGINAL AND CONDITIONAL PROBABILITIES

GROUP 10

COURSE: BUSINESS STATISTICS/SECTION A/BATCH 12-14

CONTINGENCY TABLES

PRESENTS

THE RESULTS OF TWO CATEGORICAL

VARIABLES

EACH VARIABLE IS DEFINED IN A ROW & A COLUMN

THE INTERSECTIONS OF THE ROWS & THE COLUMNS DEFINE A VALUE IN TERMS OF THE TWO VARIABLES ESSENTIALLY IT IS UTILIZED TO EXAMINE IF THERE IS A PATTERN OR RELATION SHIP BETWEEN TWO VARIABLES GIVEN A VALUE SET

MARGINAL AND CONDITIONAL PROBABILITIES

MARGINAL PROBABILITY OF AN EVENT CONSISTS OF A SET OF JOINT PROBABILITIES P(A)= P(A and B1) + P(A and B2)..P(A and Bk) Where B1.Bk are mutually exclusive and collectively exhaustive events

CONDITIONAL PROBABILITY REFERS TO THE PROBABILITY OF AN EVENT A GIVEN THE OCCURRENCE OF AN EVENT B P(A | B)* = P(A & B) / P(B) *read as probability of an event A given an event B

CONTINGENCY TABLE 1 : CATEGORY AND OBJECTIVE

13% 6% 30% p of large and growth p of small and growth p of mid and growth p of large and value

p of mid and value

23% 14% 14% p of small and value

20%

large cap c 43% p(a growth company) p(a value company) 57% small cap 53% 27%

midcap co

CONTINGENCY TABLE 2: CATEGORY AND FEES

INF: IF YOU HAVE DECIDED ON A SMALL CAP THEN THE PROBABILITY YOU WILL HAVE TO PAY FEES IS LESS THEN YOU WOULD HAVE HAD TO IF YOU HAD CHOSEN LARGE CAP OR SMALL CAP

Count of Category Category Large Cap Mid Cap Small Cap Grand Total
45% 40% 35% 30% 25% 20% 15% 10% 5% 0% P[fees given large cap]

Fees No 263 99 159 521 Yes 180 67 70 317 Grand Total 443 166 229 838

Series1

P[fees given midcap]

P[fees given smallcap]

CONTINGENCY TABLE 3: CATEGORY AND RISK INF: IF YOU HAVE DECIDED ON A MIDCAP FUND THE PROBABILITY OF CHOOSING A HIGH RISK FUND IS GREATER THAN WHEN YOU CHOOSE A LARGE CAP OR A SMALL CAP

Count of Risk Category Large Cap Mid Cap

Risk Average High 163 37 Low 153 89 Grand Total 127 40 443 166

Small Cap
Grand Total

45
245

104
346

80
247

229
838

60% 50% 40% 30% 20% 10% 0% P[Average P[High risk P[Low risk risk given given given large cap] large cap] large cap] P[Average P[High risk P[Low risk risk given given mid given mid mid cap] cap] cap] P[Average P[High risk P[Low risk risk given given given mid small cap] small cap] cap] Series1

CONTINGENCY TABLE 4: OBJECTIVE AND FEES

INF: WHETHER YOU PREFER VALUE OR GROWTH YOU MAY STILL END UP PAYING THE FEES

Count of Objective Fees No Yes Grand Total

Probability of giving fees

Objective Growth 296 184 480

Series1
38%

Value 225 133 358

Grand Total 521 317 838

37%

P[ Fees given growth ]

P[ Fees given value ]

CONTINGENCY TABLE 5: RISK AND FEES DOUBLE BLOW: GIVEN THE LEVELS OF RISK, YOUR CHANCES OF PAYING FEES ARE HIGHEST WHEN YOU GO WITH HIGH RISK

Count of Objective Risk Average High Low Grand Total

41% 40% Probability of giving fees 39% 38% 37% 36% 35% 34% 33% 32% 31% P [ Fees given average Risk]

Fees No 152 207 162 521

Yes

Grand Total 93 139 85 317

245 346 247 838

Series1

P [ Fees given high Risk]

P [Fees given low risk]

MUTUAL FUNDS ARE SUBJECT TO MARKET RISKS, READ THE OFFER DOCUMENT CAREFULLY BEFORE INVESTING

THANK YOU GROUP 10