An Energy Analyst Wants to Test If U

Multiple Choice

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