Exercise

# Are Stock Prices a Random Walk?

Most stock prices follow a random walk (perhaps with a drift). You will look at a time series of Amazon stock prices, pre-loaded in the DataFrame `AMZN`

, and run the 'Augmented Dickey-Fuller Test' from the statsmodels library to show that it does indeed follow a random walk.

With the ADF test, the "null hypothesis" (the hypothesis that we either reject or fail to reject) is that the series follows a random walk. Therefore, a low p-value (say less than 5%) means we can reject the null hypothesis that the series is a random walk.

Instructions

**100 XP**

- Import the
`adfuller`

module from statsmodels. - Run the Augmented Dickey-Fuller test on the series of closing stock prices, which is the column
`'Adj Close'`

in the`AMZN`

DataFrame. - Print out the entire output, which includes the test statistic, the p-values, and the critical values for tests with 1%, 10%, and 5% levels.
- Print out just the p-value of the test (
`results[0]`

is the test statistic, and`results[1]`

is the p-value).