(A)Is This Time Series Random? Perform a Runs Test and Compute

question 23

Essay

(A)Is this time series random? Perform a runs test and compute a few autocorrelations to support your answer.
(B)Does a linear trend appear to fit these data well? If so,estimate the linear-trend model for this time series,and interpret the value.
(C)Is there evidence of some seasonal pattern in these sales data? If so,characterize the seasonal pattern,and explain how to forecast future values.

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Definitions:

Nondiversifiable Risk

Risk that cannot be eliminated by investing in many projects or by holding the stocks of many companies.

Diversifiable Risk

Risk that can be eliminated either by investing in many projects or by holding the stocks of many companies.

Expected Return

Expected return is the anticipated profit or loss from an investment, factoring in all possible outcomes weighted by their probabilities.

Asset Beta

A constant that measures the sensitivity of an asset’s return to market movements and, therefore, the asset’s nondiversifiable risk.