Perform a Runs Test for Randomness $$\alpha$$ = 005

question 8

Essay

Perform a runs test for randomness. Be sure to do the following: Identify the claim mathematically and state the null
and alternative hypotheses. Determine the critical value and find the test statistic. Decide whether to reject or fail to
reject the null hypothesis and interpret the decision in the context of the original claim.
-An airport security officer searched carry-on bags of people boarding a plane in the sequence shown, where S
represents a searched bag and N represents a bag not searched. Can you conclude that the officer conducted a
random search? Use $$\alpha$$ = 0.05. $\begin{array} { l l l l l l l l l l } \mathrm { N } & \mathrm { N } & \mathrm { N } & \mathrm { N } & \mathrm { N } & \mathrm { S } & \mathrm { N } & \mathrm { N } & \mathrm { S } & \mathrm { S } \\\mathrm { N } & \mathrm { N } & \mathrm { N } & \mathrm { N } & \mathrm { N } & \mathrm { N } & \mathrm { N } & \mathrm { S } & \mathrm { N } & \mathrm { N } \\\mathrm { N } & \mathrm { N } & \mathrm { S } & \mathrm { S } & \mathrm { S } & \mathrm { N } & \mathrm { N } & \mathrm { N } & \mathrm { S } & \mathrm { N } \\ \mathrm { N } & \mathrm { S } & \mathrm { N } & \mathrm { N } & \mathrm { N } & \mathrm { N } & \mathrm { S } & \mathrm { S } & \mathrm { N } & \mathrm { N } \\\mathrm { N } & \mathrm { N } & \mathrm { N } & \mathrm { N } & \mathrm { N } & \mathrm { N } & \mathrm { S } & \mathrm { N } & \mathrm { N } & \mathrm { N } \end{array}$

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Definitions:

Acquisition

The process by which one company takes control over another company either by purchasing its shares, assets, or both.

Consolidated Balance Sheet

A balance sheet that represents the combined financial position of a parent company and its subsidiaries as if they were a single entity.

Book Value

The value of an asset according to its balance sheet account balance, taking into account the cost of the asset less any depreciation, amortization, or impairment costs.

Fair Value

The financial return from selling an asset or the financial obligation to cover a liability in a transaction among market entities at the point of appraisal.