Suppose that PTPTN would like to investigate if the repayment score and income level of an

individual are independent of one another. PTPTN selected a random sample of 164 employed

adults and asked them to report their repayment score and their income range. The repayment

score is measured based on the overdue of student loan repayment in months and the

following contingency table presents these results:

Annual income

range (RM)

Repayment Score

Poor

(over 3 months)

Average

(2-3 months)

Good

(below 2 months)

Below RM40,000 30 27 10

RM40,000 to

RM80,000

17 20 15

Above RM 80,000 11 16 18

a. Set up the competing hypotheses to determine if the repayment score and income level

are dependent. (2 Marks)

b. What is the degree of freedom for the test? (1 Mark)

c. Calculate the value of the test statistic (2). (4 Marks)

d. Compute the p-value. (2 Marks)

e. Does the evidence suggest the repayment score and income level are dependent at the

1% significance level? (1 Mark)