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Over time, stock prices are always on the move. Consider a time series of 1126 consecutive daily prices of McDonald's stock from the beginning of

  1. Over time, stock prices are always on the move. Consider a time series of 1126 consecutive daily prices of McDonald's stock from the beginning of January 2010 to the near the end of June 2014.1
    1. Using software, plot the prices over time. Are the prices constant over time? Describe the nature of the price movement over time.
    2. Now consider the relationship between price on any given day with the price on the prior day. The previous day's price is sometimes referred to as the lag price. You will want to get the lagged prices in another column of your software: Highlight and copy the price values, and paste them in a new column shifted down by one row.
    3. Create a scatterplot of McDonald's price on a given day versus the price on the previous day. Does the scatterplot suggest that the price series behaves as a series of independent trials? Explain why or why not
    4. Instead of looking at the prices themselves, consider now the daily changes in prices found in the provided data file.
    5. Plot the price changes over time. Describe the nature of the price changes over time.

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