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Contents of a Business Proposal

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Submitted By kimanikamau
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The degrees of freedom are the number of extra numbers you need to specify your data completely, after you have provided a summary of your data.

Example: You have ten numbers. You also know that the mean is 1.3 and the standard deviation is 0.6. Since ten numbers were required to describe your data completely and you already have two, the degrees of freedom are 10-2=8.

This is an important concept when doing statistical tests. For example, suppose you have a 2x2-table and you want to apply the chi-square test for independence between rows and columns. The chi-square test is based on the assumption that you already know 3 numbers: the row proportions, the column proportions and the totalt number of observations. Since the total number of number in your table is 4, and 3 were already known before you started to compute the chi-square statistic, the degrees of freedom is 4-3=1. Now the theory says that you must use the chi-quare table with one degree of freedom.

Confidence Level
A confidence level refers to the likelihood that the true population parameter lies within the range specified by the confidence interval . The confidence level is usually expressed as a percentage. Thus, a 95% confidence level implies that the probability that the true population parameter lies within the confidence interval is 0.95. Here, the confidence level (95%) implies a probability equal to 0.95
Significance Level
A Type I error occurs when the researcher rejects a null hypothesis when it is true. The probability of committing a Type I error is called the significance level, and is often denoted by

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