Perform a Runs Test and Compute a Few Autocorrelations to Determine

question 20

Essay

Perform a runs test and compute a few autocorrelations to determine whether this time series is random.

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Definitions:

Common Stock

A type of security that represents ownership in a corporation, giving shareholders voting rights and a claim on profits in the form of dividends.

Dividend

A disbursement from a corporation to its stockholders, often derived from earnings.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, often with dividend priority.

Common Stock

A form of corporate equity ownership, a type of security representing ownership in a corporation.