Use the Runs Test to Determine Whether the Given Sequence

question 97

Essay

Use the runs test to determine whether the given sequence is random. Use a significance level
of 0.05. A sample of 30 clock radios is selected in sequence from an assembly line. Each
radio is examined and judged to be acceptable (A)or defective (D). The results are shown
below. Test for randomness. A A D A A A D A A D
A D A A A D A A A A
A A D D A A A A D A

Distinguish between overpriced and underpriced securities in the context of CAPM.

Calculate the beta of a portfolio based on its components.

Assess the relationship between risk-free rate, market rate of return, and expected security returns.

Analyze the relevance of the market portfolio, including its properties and composition.