SOLUTION: 13. Some financial theoreticians believe that the stock market's daily prices constitute a "random walk with positive drift." If this is accurate, then the Dow Jones Industrial Ave

Algebra ->  Probability-and-statistics -> SOLUTION: 13. Some financial theoreticians believe that the stock market's daily prices constitute a "random walk with positive drift." If this is accurate, then the Dow Jones Industrial Ave      Log On


   

Question 634574: 13. Some financial theoreticians believe that the stock market's daily prices constitute a "random walk with positive drift." If this is accurate, then the Dow Jones Industrial Average should show a gain on more than 50% of all trading days. The average increased on 101 of 175 randomly chosen days. State the null and alternative hypothesis to verify the theory. Question 13 options:
Ho:P 0.5 and Ha: P > 0.50
Ho: 101 and Ha: > 101
Ho:P 0.5 and Ha: P < 0.50
Ho: 101 and Ha: < 101

Answer by ewatrrr(24785) About Me  (Show Source):
You can put this solution on YOUR website!
 

Hi,

Some financial theoreticians believe that the stock market's daily prices

 constitute a "random walk with positive drift ( > 50%)

State the null and alternative hypothesis to verify the theory. 

The idea is that Ho contains an = sign, ≤ may be used here

Ho: P ≤ 0.5 

Ha: P > 0.50 claim