A research analyst follows the biotechnology industry and examines the daily stock price of Amgen, Inc. over the past year. The table below shows a portion of the daily stock price of Amgen for the 252 trading days in 2010. The research analyst wants to test the random-walk hypothesis that suggests that stock prices move randomly over time with no discernible pattern.

Date..................... Adjusted Stock Price

1/4/2010....................................$57.72

1/5/2010.......................................57.22

⋮....................................................⋮

12/31/2010.....................................54.9

a. Use the method of runs above and below the median to test the null hypothesis of randomness against the alternative that there is a trend at the 5% significance level.

b. Can the research analyst conclude that the movement of Amgen's stock price is consistent with the random-walk hypothesis?