Let Positive Daily S&P 500 Returns Define Up Days,and Negative

question 21

Essay

Let positive daily S&P 500 returns define up days,and negative daily S&P 500 returns define down days.A stockbroker wants to know if the up and down days of the S&P 500 occur randomly.For 30 trading days,there were 17 up days,13 down days,four runs of up days,and four runs of down days.
A)Specify the competing hypotheses to determine whether S&P 500 up and down days occur at random.
B)What is the value of the Wald-Wolfowitz runs test statistic R?
C)At the 5% significance level,what is the decision and conclusion?

• A)Specify the competing hypotheses to determine whether S&P 500 up and down days occur at random.
• B)What is the value of the Wald-Wolfowitz runs test statistic R?
• C)At the 5% significance level,what is the decision and conclusion?

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Definitions:

Individualism

A cultural system that values the needs of the individual self more than those of the group.

Needs of the Self

Essential psychological requirements necessary for an individual to maintain self-integrity, personal well-being, and development.

Cultural Outlook

The perspective and attitude towards different cultures and the ways in which cultural understanding influences an individual's views and behaviors.

Individualism

A social theory favoring freedom of action for individuals over collective or state control.