For Exercises 13.1 and 13.2, see page 651; and for 13.3 and 13.4, see pages 655-656.
13.1 Disney prices.
In Example 13.1, we found the weekly returns of Disney stock to be consistent with a random process. What can we say about the time series of the weekly closing prices?
13.1
(a) The series is not random; it is increasing over time. (b) There are only 8 runs. Because there should be many more runs than just 8, the process isn’t random. This is consistent with part (a).
disney