At the beginning of this chapter, the term quadrophobia was defined as the apparent aversion that many
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At the beginning of this chapter, the term quadrophobia was defined as the apparent aversion that many firms seem to have of arriving at earnings-per-share calculations that end with the digit “4.” Here’s your chance to investigate the presence of the quadrophobia phenomenon. Suppose you reviewed 1,000 earnings statements from randomly selected companies and found the following frequency distribution for the final digits for earnings per share:
Final Digit Frequency Final Digit Frequency 0 116 5 106 1 100 6 105 2 81 7 106 3 80 8 110 4 80 9 116
a. Using a = 0.05, determine if the presence of quadrophobia is evident.
b. Determine the p-value using Excel and interpret its meaning.
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