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Question 1 - Investment Portfolio (12 marks) Consider the daily percent change in the stock price of two companies, A and B, in an investment

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Question 1 - Investment Portfolio (12 marks) Consider the daily percent change in the stock price of two companies, A and B, in an investment portfolio. The dataset is called Investment Portfolio. Answer the following questions manually. Use statistical software or MS Excel for help with the computation of any summary statistics needed for manual computations. a) Draw a scatterplot of the company A daily percent changes against the company B daily percent changes. Describe the relationship between daily percent changes that you see in this scatterplot. b) Determine the regression equation to predict the daily percent change in the stock price of company A from the daily percent change in the stock price of company B. Interpret the value of the slope coefficient. c) Find the correlation between the percent changes. Does the correlation value support your description of the scatterplot in part a)? d) Compute the corresponding coefficient of determination and interpret its value. In financial terms, it represents the proportion of non-diversifiable risk in company A. e) Compute the 95% confidence interval for the slope coefficient. f) Test at the 5% significance level whether the slope coefficient is significantly different from 1, representing the beta of a highly diversified portfolio. Don't forget to show your computations

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