Ex. 2. In 2015, Mariam, an engineer with Total Petroleum, decided to invest in stocks of...

Transcribed Image Text:

Ex. 2. In 2015, Mariam, an engineer with Total Petroleum, decided to invest in stocks of a corporation that concentrates on crude oil production and refined products, though the price of oil is a very volatile commodity during recent years. She found the Global Crude Oil Index on the web, plus the recorded annual prices (in dollars per barrel, $/bbl, as of December of each year) for two very well-known oil categories-Brent-Europe (B-E) and West Texas Intermediate (WTI). The data for all three are presented below for the period 2008 through 2015. The GCO Index has a base year of 2005 of 100 points. B-E GCO Recorded, WTI Recorded, Year Index $/bbl $/bbl 2008 105.1 35.82 44.60 2009 141.9 77.91 79.39 2010 160.6 93.23 91.38 2011 194.4 108.09 98.83 2012 192.3 110.80 91.83 2013 196.8 109.95 98.17 2014 140.2 62.16 53.45 2015 79.3 36.61 37.13 Use the cost index equation to do the following: 1 (a) Predict the price for years 2009 through 2015 for both B-E and WTI crude (use the price of B-E and WTI crude at 2008 as the Co). (b) Plot the Brent-Europe recorded and predicted price from 2008 to 2015. (c) Plot the West Texas Intermediate recorded and predicted price from 2008 to 2015. (d) Which of the two categories of oil does the index appear to track more closely? Ex. 2. In 2015, Mariam, an engineer with Total Petroleum, decided to invest in stocks of a corporation that concentrates on crude oil production and refined products, though the price of oil is a very volatile commodity during recent years. She found the Global Crude Oil Index on the web, plus the recorded annual prices (in dollars per barrel, $/bbl, as of December of each year) for two very well-known oil categories-Brent-Europe (B-E) and West Texas Intermediate (WTI). The data for all three are presented below for the period 2008 through 2015. The GCO Index has a base year of 2005 of 100 points. B-E GCO Recorded, WTI Recorded, Year Index $/bbl $/bbl 2008 105.1 35.82 44.60 2009 141.9 77.91 79.39 2010 160.6 93.23 91.38 2011 194.4 108.09 98.83 2012 192.3 110.80 91.83 2013 196.8 109.95 98.17 2014 140.2 62.16 53.45 2015 79.3 36.61 37.13 Use the cost index equation to do the following: 1 (a) Predict the price for years 2009 through 2015 for both B-E and WTI crude (use the price of B-E and WTI crude at 2008 as the Co). (b) Plot the Brent-Europe recorded and predicted price from 2008 to 2015. (c) Plot the West Texas Intermediate recorded and predicted price from 2008 to 2015. (d) Which of the two categories of oil does the index appear to track more closely?