Question: based on the information below: Describe the data sources and the methodology you used to test UIP. Explain how you collected and analyzed data, and

based on the information below:

  • Describe the data sources and the methodology you used to test UIP.
  • Explain how you collected and analyzed data, and why you chose this approach.

based on the information below: Describe the data sources and the methodologyyou used to test UIP. Explain how you collected and analyzed data,and why you chose this approach. IM NOT PAYING YOU ON APLATFORM THAT ALREADY PAYS YOU. \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline A & B & C& D & E & F & G & H & 1& J & K \\ \hline 1 Jate & USD/CAD & USAInterest Rate & CAN Interest rate & Predicted exchange rate & Actual

IM NOT PAYING YOU ON A PLATFORM THAT ALREADY PAYS YOU.

\begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline A & B & C & D & E & F & G & H & 1 & J & K \\ \hline 1 Jate & USD/CAD & USA Interest Rate & CAN Interest rate & Predicted exchange rate & Actual exchange rate & & & & & \\ \hline 1/1/04 & 1.3250 & 4.2742 & 4.5796 & 0.9971 & 1.0684 & & & & & \\ \hline 1/1/05 & 1.2402 & 4.2900 & 4.0669 & 1.0021 & 1.0891 & & & & & \\ \hline 1/1/06 & 1.1387 & 4.7917 & 4.2078 & 1.0056 & 0.9689 & & & & & \\ \hline 1/1/07 & 1.1752 & 4.6292 & 4.2698 & 1.0034 & 1.1737 & & & & & \\ \hline 1/1/08 & 1.0013 & 3.6667 & 3.6053 & 1.0006 & 0.8102 & & & & & \\ \hline 1/1/09 & 1.2359 & 3.2567 & 3.2306 & 1.0003 & 1.1572 & & & & & \\ \hline 1/1/10 & 1.0680 & 3.2142 & 3.2351 & 0.9998 & 1.0656 & & & & & \\ \hline 1/1/11 & 1.0023 & 2.7858 & 2.7830 & 1.0000 & 0.9999 & & & & & \\ \hline 1/1/12 & 1.0024 & 1.8025 & 1.8734 & 0.9993 & 1.0002 & & & & & \\ \hline 1/1/13 & 1.0022 & 2.3508 & 2.2620 & 1.0009 & 0.8984 & & & & & \\ \hline 1/1/14 & 1.1156 & 2.5408 & 2.2308 & 1.0030 & 0.8763 & & & & & \\ \hline 1/1/15 & 1.2731 & 2.1358 & 1.5217 & 1.0060 & 0.9108 & & & & & \\ \hline 1/1/16 & 1.3978 & 1.8417 & 1.2518 & 1.0058 & 1.0669 & & & & & \\ \hline 1/1/17 & 1.3102 & 2.3300 & 1.7837 & 1.0054 & 1.0621 & & & & & \\ \hline 1/1/18 & 1.2336 & 2.9100 & 2.2779 & 1.0062 & 0.9387 & & & & & \\ \hline 1/1/19 & 1.3141 & 2.1442 & 1.5889 & 1.0055 & 0.9947 & & & & & \\ \hline 1/1/20 & 1.3211 & 0.8942 & 0.7531 & 1.0014 & 1.0341 & & & & & \\ \hline 1/1/21 & 1.2776 & 1.4425 & 1.3588 & 1.0008 & 1.0013 & & & & & \\ \hline 1/1/22 & 1.2759 & & & & & & & & & \\ \hline 21 & & & & & & & & & & \\ \hline 22 & & & & & & & & & & \\ \hline 23 & & & & & & & & & & \\ \hline \end{tabular} Ready Accessibility: Good to go Actual Exchange Rate Change Histogram of Residuals [1] Standard Errors assume that the covariance matrix of the errors is correctly specified. Time Series of USD/CAD Exchange Rate Histogram of Residuals Actual Exchange Rate Change \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline A & B & C & D & E & F & G & H & 1 & J & K \\ \hline 1 Jate & USD/CAD & USA Interest Rate & CAN Interest rate & Predicted exchange rate & Actual exchange rate & & & & & \\ \hline 1/1/04 & 1.3250 & 4.2742 & 4.5796 & 0.9971 & 1.0684 & & & & & \\ \hline 1/1/05 & 1.2402 & 4.2900 & 4.0669 & 1.0021 & 1.0891 & & & & & \\ \hline 1/1/06 & 1.1387 & 4.7917 & 4.2078 & 1.0056 & 0.9689 & & & & & \\ \hline 1/1/07 & 1.1752 & 4.6292 & 4.2698 & 1.0034 & 1.1737 & & & & & \\ \hline 1/1/08 & 1.0013 & 3.6667 & 3.6053 & 1.0006 & 0.8102 & & & & & \\ \hline 1/1/09 & 1.2359 & 3.2567 & 3.2306 & 1.0003 & 1.1572 & & & & & \\ \hline 1/1/10 & 1.0680 & 3.2142 & 3.2351 & 0.9998 & 1.0656 & & & & & \\ \hline 1/1/11 & 1.0023 & 2.7858 & 2.7830 & 1.0000 & 0.9999 & & & & & \\ \hline 1/1/12 & 1.0024 & 1.8025 & 1.8734 & 0.9993 & 1.0002 & & & & & \\ \hline 1/1/13 & 1.0022 & 2.3508 & 2.2620 & 1.0009 & 0.8984 & & & & & \\ \hline 1/1/14 & 1.1156 & 2.5408 & 2.2308 & 1.0030 & 0.8763 & & & & & \\ \hline 1/1/15 & 1.2731 & 2.1358 & 1.5217 & 1.0060 & 0.9108 & & & & & \\ \hline 1/1/16 & 1.3978 & 1.8417 & 1.2518 & 1.0058 & 1.0669 & & & & & \\ \hline 1/1/17 & 1.3102 & 2.3300 & 1.7837 & 1.0054 & 1.0621 & & & & & \\ \hline 1/1/18 & 1.2336 & 2.9100 & 2.2779 & 1.0062 & 0.9387 & & & & & \\ \hline 1/1/19 & 1.3141 & 2.1442 & 1.5889 & 1.0055 & 0.9947 & & & & & \\ \hline 1/1/20 & 1.3211 & 0.8942 & 0.7531 & 1.0014 & 1.0341 & & & & & \\ \hline 1/1/21 & 1.2776 & 1.4425 & 1.3588 & 1.0008 & 1.0013 & & & & & \\ \hline 1/1/22 & 1.2759 & & & & & & & & & \\ \hline 21 & & & & & & & & & & \\ \hline 22 & & & & & & & & & & \\ \hline 23 & & & & & & & & & & \\ \hline \end{tabular} Ready Accessibility: Good to go Actual Exchange Rate Change Histogram of Residuals [1] Standard Errors assume that the covariance matrix of the errors is correctly specified. Time Series of USD/CAD Exchange Rate Histogram of Residuals Actual Exchange Rate Change

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!