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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TABLE 11.3.17 Change in the Price of a Dollar in Selected Currencies Date 6/21/2010-0.15% 622/2010 032 6/23/2010 078 6/24/2010 015 6/25/2010 -037 6/26/2010 006 6727/2010 -032 6/28/2010 01 6/29/2010 027 630/2010 04 7/1/2010 035 72/2010 091 3/2010 1.40 7/4/2010 -020 75/2010 0.01 7/62010 0.21 77/2010 050 78/20100.4 7A2010 -050 7A02010 005 Pound -009% 0.09 0.39 0.78 049 004 3.64 -006% 0.41 0.01 0.09 002 045 0.16 0.08 0.05 002 030 -0.20 0.12 0.03 0.21 0.42 0.00 030 057 -0.94 0.66 0.11 043 0.02 0.20 0.12 0.02 0.14 -0.41 1.15 1/2010 0.18 7/12/2010 001 7/13/2010 3 714/2010 038 7A 2010 -0.75 7162010 -084 7172010 -086 7/18/2010 013 7192010 0.0 7120/2010 -017 7121/2010 018 0.10 001 004 0.19 1.09 0.26