For Exercises 13.1 and 13.2, see page 651; and for 13.3 and 13.4, see pages 655-656.

Question 13.3

13.3 Disney prices.

Continue the study of Disney closing prices from Exercise 13.1 (page 651).

  1. Using software, create a lag one variable for prices. Make a scatterplot of prices plotted against the lag one variable. Describe what you see.
  2. Find the correlation between prices and their first lag. Test the null hypothesis that the underlying lag one correlation is 0. What is the -value? What do you conclude?

13.3

(a) The price and lag one price are linearly related. (b) . The underlying lag one correlation is significantly different from 0. The price and lag one price are significantly correlated.

disney