Random Walk Down Wall Street Does a stock price fluctuate randomly from day to day To

Chapter 15, Problem 13

(choose chapter or problem)

Random Walk Down Wall Street? Does a stock price fluctuate randomly from day to day? To answer this question, a stock analyst selected 48 consecutive days in which the stock of Boeing Corporation was traded and computed the daily percentage change in the stock. He indicated positive percentage changes with a P and negative percentage changes with an N. The results are in the following table. What conclusion will the analyst reach if he tests the hypothesis that the stock price fluctuates randomly from day to day at the a = 0.05 level of significance? Date Return Date Return Date Return 11/22/2010 N 12/15/2010 N 1/7/2011 P 11/23/2010 N 12/16/2010 P 1/10/2011 N 11/24/2010 P 12/17/2010 P 1/11/2011 N 11/26/2010 N 12/20/2010 N 1/12/2011 P 11/29/2010 N 12/21/2010 P 1/13/2011 N 11/30/2010 N 12/22/2010 P 1/14/2011 P 12/1/2010 P 12/23/2010 P 1/18/2011 P 12/2/2010 P 12/27/2010 N 1/19/2011 N 12/3/2010 N 12/28/2010 P 1/20/2011 N 12/6/2010 P 12/29/2010 P 1/21/2011 P 12/7/2010 N 12/30/2010 N 1/24/2011 P 12/8/2010 P 12/31/2010 P 1/25/2011 N 12/9/2010 N 1/3/2011 P 1/26/2011 N 12/10/2010 N 1/4/2011 P 1/27/2011 P 12/13/2010 N 1/5/2011 P 1/28/2011 N 12/14/2010 P 1/6/2011 P 1/31/2011 P