Question 634576
 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.
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p-hat = 101/175 = 0.5771
z(0.58) = (0.58-0.50)/sqrt[0.5*0.5/175] = 2.1166
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Ho: p <= 0.5
Ha: p > 0.5(claim)


 If = 5%, what do you think about the suggested theory? Question 15 options:

Ans: Since the critical Z value is 1.645, we are going to reject Ho.
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Cheers,
Stan H.