Question

Now consider also the daily percentage changes in the price of a dollar in Japanese yen from Table 11.3.17, along with the euro.
a. Create a scatterplot of the euro’s against the yen’s percentage changes.
b. Given that the yen and the euro are far apart geographically, we might expect that their values, with respect to the dollar, would tend to move together only weakly if at all. To evaluate this, compute and interpret the correlation between the yen’s percentage changes and the euro’s.
c. Compare the correlation between the yen and the euro to the correlation between the pound and the euro, and interpret these results with respect to geographical closeness.
d. Test at the 5% level to see if there is a significant link between movements in the yen and the euro.
QUESTION CONTINUE TO NEXT PAGE……


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  • CreatedNovember 11, 2015
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