The table to the right classifies a stock\'s price change as up, down, or no cha

Question

The table to the right classifies a stock's price change as up, down, or no change for both Price today's and yesterday's prices. Price changes were examined for 102 days. A financia Change theory states that the price change of today for a stock must be independent of yesterday's Today price change. Test the hypothesis that daily stock price changes for this stock are independent. Let = 0.025. Price Change Previous Day Up No Change Down Up i 8 No Change 5 7 13 Down 16 15 Calculate the test statistic. X2 = (Round to four decimal places as needed.) Calculate the p-value. p-value (Round to four decimal places as needed.) Determine a conclusion. Choose the correct answer below.

Explanation / Answer

The statistical software output for this problem is:

Contingency table results:
Rows: var13
Columns: None

Chi-Square test:

Hence,

Test statistic = 4.9499

p - Value = 0.2925

Up No Charge Down Total Up 11 18 8 37 No Charge 5 7 9 21 Down 16 13 15 44 Total 32 38 32 102

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