Many people believe that there is a \"Friday effect r the stock market. They don

Question

Many people believe that there is a "Friday effect r the stock market. They don't necessarily stifle out exactly what they mean by this, but there is a sense that stock prices tend to be lower on Fridays than on other days Because stock prices are readily available on the Web. it should be fairly easy to test this (alternative) hypothesis empirically. Before collecting data and running a test, however, you must decide exuded which hypotheses you warn to test because there are several possibilities. Formulate at least two sets of null/alternative hypotheses. Then gather some stock price data and test your hypotheses. Can you conclude that there is a statistically significant Friday effect in the stock market?

Explanation / Answer

In the stock market, is there any friday effect prsent in the Daily data. For that purpose we use the seasonality test we apply on the dataset then we conclude that if p- value is greater than significant value then we conclude that there is no friday day effect on the trading market in stock. the null Hypothesis is as follow

H0: Friday trading of stock is higher than the other day.

if effect is prsent then we conclude that friday play a important role in trading. another way if p- value is insignificant then we say that friday not affect the trading of the stock market.

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