Question no 2

The table to the right classies a stock's price change as up, down, or no change for both today's and yesterday's prices. Price Price Price Change Previous % changes were examined for 3? days. A nancial theory states that the price change of tort ay for a stock must be independent of Change Day yesterday's price change. Test the hypothesis that daily stock price changes for this stock are independent. Let a: 0.01. today Up Hg Change Down U p 9 15 T No Change 8 5 T Down 1 4 1:1 3 Determine the null and alternative hypotheses for the test. Choose the correct answer below. 0 A. H0: Today's price change and yesterday's price change have equal proportions. HA: Today's price change and yesterday's price change have nonequal pro portions. 0 B. HD: Today's price change and yesterday's price change are independent. HA: Today's price change and yesterday's price change are not independent. 0 C. H0: Today's price change and yesterday's price change have nonequal proportions. HA3 Today's price change and yesterday's price change have equal proportions. O D. H0: Today's price change and yesterday's price change are not independent. HA: Today's price change and yesterday's price change are independent. Calculate the test statistic. x (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. O A. Do not reject Ho. There is sufficient evidence to conclude that today's price change and yesterday's price change are not independent. O B. Do not reject Ho. There is insufficient evidence to conclude that today's price change and yesterday's price change are not independent. O C. Reject Ho. There is insufficient evidence to conclude that today's price change and yesterday's price change are not independent. O D. Reject Ho. There is sufficient evidence to conclude that today's price change and yesterday's price change are not independent