An Energy Analyst Wants to Test If U

question 105

Multiple Choice

An energy analyst wants to test if U.S. oil production is random over time. The analyst has monthly production values for the two years. The analyst finds 12 months are above the median, 12 months are below the median, six runs are below the median, and five runs are above the median. To test the random-walk hypothesis about oil production, the competing hypothesis are ________.

• A) H₀: Oil production is not random; H_A: Oil production is random
• B) H₀: Oil production is random; H_A: Oil production increases over time
• C) H₀: Oil production is random; H_A: Oil production decreases over time
• D) H₀: Oil production is random; H_A: Oil production is not random

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Definitions:

Fair Values

An estimate of the market value of an asset or liability based on current market prices or valuations.

Retained Earnings

The cumulative amount of profits that a company has earned, less any dividends or other distributions to shareholders over its life.

Investment in Stanton Inc.

The total financial outlay made by an entity to purchase shares or a stake in Stanton Inc., reflecting an investment decision.

Consolidated Income Statement

A financial statement that combines the income statements of a parent company and its subsidiaries.