Hi all… This topic continually gives me trouble. Anyone know in laymans terms or in a while that I can grasp it explain with the F test is and the Chi squared… do you use it in place of the Z or T test? When do you use it? Thanks so much
F Test = testing between two variance Chi Test = testing if a variance = x
Apart from what Matori just said, F test and Chi test can not be used in place of T or Z as T and Z are test of mean. z test: normal distribution, population variance known, population variance unknown if sample size>30, test of mean such as avg=3, avg!=3, avg>3 or avg<3 t test: normal distribution, population variance unknown, sample size large or small, test of mean such as avg=3, avg!=3, avg>3 or avg<3 t test: comparison of means avg1=avg2 if population means are assumed to be equal and independent, t test with sp variance is used wherein sp is calculated using both s1 and s2 if population means are not assumed to be equal and independent, t test with s1 and s2 formula is used. Paired comparison test: test for avg1=avg2 when means are dependent such as stocks from the same industry. Chi test: var=3 var!=3, var=0 etc etc Remember this is a variance test, not mean. F test: var1=var2 All of the above tests assume that you are testing for normal distribution. If you have non normal distribution, distribution with large sample size can be considered normal. Therefore, all tests for normal distribution can be applied to non normal distribution as long as sample size is large(30) enough. If sample size is not large(<30), non parametric test need be applied. I hope it helps!
Awesome thank u so much!
I chose not to devote much time to hypothesis testing. I beleive Chi Squared is for a 1 variable test but I’m not exactly sure, I rarely see questions on hypothesis testing.
What I think helps a lot if you just cant seem to get a topic is to drill the heck out of it on the Schweser Q Bank. If you know most of a topic I find the Q Bank helps to fill in gaps.