Random Walk Down Wall Street Does the Dow Jones Industrial Average (DJIA) fluctuate
Chapter 15, Problem 14(choose chapter or problem)
Random Walk Down Wall Street? Does the Dow Jones Industrial Average (DJIA) fluctuate randomly from quarter to quarter? (A quarter refers to a quarter of the year. For example, JanuaryMarch is the first quarter, AprilJune is the second quarter, and so on.) To answer this question, a stock analyst selected 40 consecutive quarters and computed the percentage change in the DJIA. He indicated positive percentage changes with a P and negative percentage changes with an N. The following are the results. Conduct a runs test for randomness on the sequence of quarterly market fluctuations at the a = 0.05 level of significance. Quarter Return Quarter Return Quarter Return First, 2001 N Third, 2004 N First, 2008 N Second, 2001 P Fourth, 2004 P Second, 2008 N Third, 2001 N First, 2005 N Third, 2008 N Fourth, 2001 P Second, 2005 N Fourth, 2008 N First, 2002 N Third, 2005 P First, 2009 N Second, 2002 N Fourth, 2005 P Second, 2009 P Third, 2002 N First, 2006 P Third, 2009 P Fourth, 2002 P Second, 2006 P Fourth, 2009 P First, 2003 N Third, 2006 P First, 2010 P Second, 2003 P Fourth, 2006 P Second, 2010 N Third, 2003 P First, 2007 N Third, 2010 P Fourth, 2003 P Second, 2007 P Fourth, 2010 P First, 2004 P Third, 2007 P Second, 2004 P Fourth, 2007 N Source: The Vanguard Group
Unfortunately, we don't have that question answered yet. But you can get it answered in just 5 hours by Logging in or Becoming a subscriber.
Becoming a subscriber
Or look for another answer