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

question 32

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

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Grasp the conditions and implications of lockouts as a counterpart to strikes.

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Definitions:

Deferred Revenue

Income received by a company for goods or services yet to be delivered or performed, recognized as a liability on the balance sheet.

Utilities Expense

Utilities expense refers to the cost incurred by a business for the consumption of utility services such as electricity, water, and gas.

Accounts Payable

Liabilities or amounts owed by a company to creditors for goods and services that have been purchased on credit but not yet paid for.

Journal

A chronological record where financial transactions are initially recorded using the double-entry accounting system before being transferred to accounts in the ledger.