Question: Question 2 (7 marks) The daily returns over a selected period for shares in Aaron's Adventures and Bradley's Boats (A and B) have been recorded

 Question 2 (7 marks) The daily returns over a selected period

Question 2 (7 marks) The daily returns over a selected period for shares in Aaron's Adventures and Bradley's Boats (A and B) have been recorded and provided to you in the Assignment Data spreadsheet under "Q2". Use this data to answer the following questions. a) (C) Make an appropriate graph of the pairs of daily returns. Include all relevant labels to make your graph clear. [2 marks] b) (C) State the Pearson's correlation coefficient for these daily returns. You do not need to show any working for this part. [1 mark] c) (W) Explain what your result in part b) means with reference to your graph in part a). [2 marks] d) (W) Suppose you wanted to simulate more data points to help predict future returns. First describe what features (in particular, dependencies) of the current data you would try to preserve. What process would you choose to simulate your data? Explain how you chosen method would preserve your chosen features. [2 marks]

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