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The below classifies a stock's price change as up, down, or no change for today's and yesterday's prices. Price changes were examined for 100 days. A financial theory states that stock prices follow what is called a "random walk." This means, in part, that the price change today for a stock must be independent of yesterday's price change. Use significant level of 5%, test the hypothesis that daily stock price changes for this stock are independent. 1.

The below classifies a stock's price change as up, down, or no change for today's and yesterday's prices. Price changes were examined for 100 days. A financial theory states that stock prices follow what is called a "random walk." This means, in part, that the price change today for a stock must be independent of yesterday's price change. Use significant level of 5%, test the hypothesis that daily stock price changes for this stock are independent. 1.

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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1. The below classifies a stock's price change as up, down, or no change for today's and yesterday's prices. Price changes were examined for 100 days. A financial theory states that stock prices follow what is called a "random walk." This means, in part, that the price change today for a stock must be independent of yesterday's price change. Use significant level of 5%, test the hypothesis that daily stock price changes for this stock are independent. PRICE CHANGE TODAY Select one: PRICE CHANGE A. 2.1986 B. 9.488 C. 0.3577 D. 1.2986 PREVIOUS DAY Up Up No Change 6 Down 16 Total 14 Calculate the test statistic for this problem. No Change 16 8 14 36 38 Down Total 12 8 26 42 20 38 100
Transcribed Image Text:1. The below classifies a stock's price change as up, down, or no change for today's and yesterday's prices. Price changes were examined for 100 days. A financial theory states that stock prices follow what is called a "random walk." This means, in part, that the price change today for a stock must be independent of yesterday's price change. Use significant level of 5%, test the hypothesis that daily stock price changes for this stock are independent. PRICE CHANGE TODAY Select one: PRICE CHANGE A. 2.1986 B. 9.488 C. 0.3577 D. 1.2986 PREVIOUS DAY Up Up No Change 6 Down 16 Total 14 Calculate the test statistic for this problem. No Change 16 8 14 36 38 Down Total 12 8 26 42 20 38 100
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