An energy analyst wants to test if U.S. oil production is random over time. The analyst has monthly production values for the two years. The analyst finds 12 months are above the median, 12 months are below the median, six runs are below the median, and five runs are above the median. To test the random-walk hypothesis about oil production, the competing hypothesis are ________. A) H₀: Oil production is not random; H_A: Oil production is random B) H₀: Oil production is random; H_A: Oil production increases over time C) H₀: Oil production is random; H_A: Oil production decreases over time D) H₀: Oil production is random; H_A: Oil production is not random

Question

Quizplus · Accepted Answer

The null hypothesis in this case is that oil production is random, while the alternative hypothesis is that it is not random. Therefore, the best choice is D, which includes null hypothesis H₀: Oil production is random and alternative hypothesis H_A: Oil production is not random. The other answer choices suggest alternative hypotheses that oil production either increases or decreases over time, but the prompt does not provide any evidence to support these claims.

An Energy Analyst Wants to Test If U