Plot in the same scattergram gold prices, cpi

Assignment Help Microeconomics
Reference no: EM13882177

Table 3.7 gives data on gold prices, the Consumer Price Index (CPI), and the New York Stock Exchange (NYSE) Index for the United States for the period 1977-1991. The NYSE Index includes most of the stocks listed on the NYSE, some 1500 plus.

 

 

 

 

Year

 

Price of gold at New York,

$ per troy ounce

 

Consumer Price Index (CPI), 1982-84 = 100

New York Stock Exchange (NYSE) Index,

Dec. 31, 1965 = 100

1977

147.98

60.6

53.69

1978

193.44

65.2

53.70

1979

307.62

72.6

58.32

1980

612.51

82.4

68.10

1981

459.61

90.9

74.02

1982

376.01

96.5

68.93

1983

423.83

99.6

92.63

1984

360.29

103.9

92.46

1985

317.30

107.6

108.90

1986

367.87

109.6

136.00

1987

446.50

113.6

161.70

1988

436.93

118.3

149.91

1989

381.28

124.0

180.02

1990

384.08

130.7

183.46

1991

362.04

136.2

206.33

 
TABLE 3.7

a. Plot in the same scattergram gold prices, CPI, and the NYSE Index.

b. An investment is supposed to be a hedge against in?ation if its price and/or rate of return at least keeps pace with in?ation. To test this hypothesis, suppose you decide to ?t the following model, assuming the scatterplot in a suggests that this is appropriate:

Gold price t = β1 + β2 CPI t + ut
NYSE index t = β1 + β2 CPI t + ut

Reference no: EM13882177

Questions Cloud

Realize arbitrage profits in dollars net of transaction cost : An arbitrager at Deutsche Bank notices that the yield on Brazilian Real 6-month risk-free bills is 5.5% per annum and the yield on U.S. 6-month T-bills is 7% per annum. What transactions will the arbitrageur undertake to realize arbitrage profits in ..
Paper on the crowding effect the war on drugs : Write a 700- to 800 word paper on the crowding effect the war on drugs has had on correctional organizations in your state
Conduct programs at the capacity level for the technique : Conduct programs at the capacity level for the technique with lowest costeffectiveness ratio. Offer programs using as many techniques as possible to treat up to 1300 people per year using the most cost-effective techniques.
Productions pays no dividend at the present time : Yesteryear Productions pays no dividend at the present time. The company plans to start paying an annual dividend in the amount of $2 a share next year, $4 a share the following year and then the company plans on increasing the dividend 10% annually...
Plot in the same scattergram gold prices, cpi : An investment is supposed to be a hedge against in?ation if its price and/or rate of return at least keeps pace with in?ation. To test this hypothesis, suppose you decide to ?t the following model, assuming the scatterplot in a suggests that this ..
Pros and cons of using debt vs. angel money vs. venture : Explain the pros and cons of using Debt vs. Angel money vs. Venture Capital
Determining the standard normal distribution : The scaling factor k must be such that the total probability is one. Therefore, we have k = 1/36. The table shows one instance where x + y >5, which is x = 3, y = 3. The probability is p = 9/36 = 1/4.
Does the scattergram support the theory : What is the economic theory behind the relationship between the two variables? Does the scattergram support the theory?
Information about the return distributions : An analyst gathered the following information about the return distributions for two portfolios during the same time period:

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd