00:01
The first thing that we'd want to do whenever answering these types of questions is to define our null hypothesis and its alternative.
00:09
So based on the information that we have been given, the null hypothesis, we are saying the series being followed by the data that we've been given is random.
00:18
And the alternative is going to be the series is not random.
00:23
So if we, for example, first of all, look at the facebook new visitors, what we need to do here, to determine whether or not we accept the null hypothesis we need a test statistic and the type of state statistics that we use is based on the information that we have been given so for example we have been told that we are looking at nine observations so we've got an n value that is equal to nine then we also have the number of runs and they can be represented by an r value that is equal to so based on this we can already tell that we are going to be using the rans test statistic.
01:06
And for n is equal to 9 and nr is equal to 6, the runs statistic, this is going to be equal to 0 .754.
01:19
Now this is the actual runs statistic test.
01:23
So what we need is to check whether this value falls within the critical region for us to then say we are accepting or rejecting the null hypothesis.
01:33
Now based on this we can have a critical value based on a certain significance level.
01:41
For example if we are looking at 2 1 minus alpha of 0 .754 what we are looking at is 0 .492...