Suppose you are able to predict the change in the price of a contract, then you would be able to make a profit by buying when you predict that the price will rise, and selling when you predict that the price will fall. Can you forecast the change in the price, Pt+1/P+ systematically in these data? (The simplest way is probably to use regression analysis to see if you can forecast Pt+1/pt by some other variables known at time t.) Date Clinton Obama Edwards Gore 1/3/2007 50 21 10 2/3/2007 45.1 24.9 9.5 3/3/2007 46.9 24.4 10 4/3/2007 46.6 24.5 10 5/3/2007 45.3 28.6 9.7 6/3/2007 44.2 30 8.5 7/3/2007 45.1 29.2 8.7 8/3/2007 43.9 30 8.6 9/3/2007 44.2 29.8 8.6 10/3/2007 44.3 30 8.6 11/3/2007 44.3 30 9.5 12/3/2007 44 31.9 9.5 13/3/2007 44.9 29.6 9.9 14/3/2007 44.7 30 9.3 15/3/2007 45 31 8.7 16/3/2007 45 30.1 9 17/3/2007 45.2 30.1 9.9 18/3/2007 45.2 30.1 9.9 19/3/2007 46.2 30.1 9.7 20/3/2007 45.4 29.4 9 21/3/2007 45.8 29.2 8.8 9.7 11.9 12.9 12.9 11.5 11.9 12.5 11.9 11.8 11.6 11.3 9.1 11.5 10.2 9.7 9.6 10.5 10.6 10 9.7 10.2 22/3/2007 23/3/2007 24/3/2007 25/3/2007 26/3/2007 27/3/2007 28/3/2007 29/3/2007 30/3/2007 31/3/2007 46.6 47.2 48.9 47.6 47.8 48.5 48.5 49.2 49.3 31.5 31.5 30.3 29.8 28.8 29 28.4 27.5 28.4 28.4 7.5 7 6.9 6.9 6.8 7.7 7.2 7.2 8.3 6.4 12 12 10.6 11 11 10.6 10.6 10.7 10.9 10.5 49.6 1/1/2008 2/1/2008 3/1/2008 4/1/2008 5/1/2008 6/1/2008 7/1/2008 8/1/2008 9/1/2008 10/1/2008 11/1/2008 12/1/2008 13/1/2008 14/1/2008 15/1/2008 16/1/2008 17/1/2008 18/1/2008 19/1/2008 20/1/2008 21/1/2008 22/1/2008 66 64.9 51.9 51.1 47 35.2 27 56.8 59 55.7 55.1 56 57.2 57.3 58.6 59.2 57.4 58.1 64.5 66.1 67 66 25.6 26 45 46 52.1 63 70.7 39 38.2 41.2 43.1 40.5 40.8 40 39.3 38.5 40.4 39.6 33.8 30.5 33 31.1 6.3 7.1 2.3 2.6 21 2.4 2.6 1.6 1.4 1.5 1.2 1.4 1.5 1.2 1.5 11 1.1 1.3 1 0.9 0.9 0.9 1.8 1.8 1.7 1.7 1.4 1 0.7 1 1 0.9 0.9 0.9 1 1 1 1 1 1 0.9 0.9 0.9 0.9 11 1 1 23/1/2008 24/1/2008 25/1/2008 26/1/2008 27/12008 28/1/2008 29/1/2008 30/1/2008 31/1/2008 68.2 65.9 67.3 64.8 62.7 62.4 63 62.1 60.1 32.1 32.2 30.3 34.7 37.1 38.3 36.7 36.6 37.1 1 0.9 0.7 0.6 0.6 0.5 0.5 0.2 0.3 1 1.1 1.1 1 0.9 0.8 Suppose you are able to predict the change in the price of a contract, then you would be able to make a profit by buying when you predict that the price will rise, and selling when you predict that the price will fall. Can you forecast the change in the price, Pt+1/P+ systematically in these data? (The simplest way is probably to use regression analysis to see if you can forecast Pt+1/pt by some other variables known at time t.) Date Clinton Obama Edwards Gore 1/3/2007 50 21 10 2/3/2007 45.1 24.9 9.5 3/3/2007 46.9 24.4 10 4/3/2007 46.6 24.5 10 5/3/2007 45.3 28.6 9.7 6/3/2007 44.2 30 8.5 7/3/2007 45.1 29.2 8.7 8/3/2007 43.9 30 8.6 9/3/2007 44.2 29.8 8.6 10/3/2007 44.3 30 8.6 11/3/2007 44.3 30 9.5 12/3/2007 44 31.9 9.5 13/3/2007 44.9 29.6 9.9 14/3/2007 44.7 30 9.3 15/3/2007 45 31 8.7 16/3/2007 45 30.1 9 17/3/2007 45.2 30.1 9.9 18/3/2007 45.2 30.1 9.9 19/3/2007 46.2 30.1 9.7 20/3/2007 45.4 29.4 9 21/3/2007 45.8 29.2 8.8 9.7 11.9 12.9 12.9 11.5 11.9 12.5 11.9 11.8 11.6 11.3 9.1 11.5 10.2 9.7 9.6 10.5 10.6 10 9.7 10.2 22/3/2007 23/3/2007 24/3/2007 25/3/2007 26/3/2007 27/3/2007 28/3/2007 29/3/2007 30/3/2007 31/3/2007 46.6 47.2 48.9 47.6 47.8 48.5 48.5 49.2 49.3 31.5 31.5 30.3 29.8 28.8 29 28.4 27.5 28.4 28.4 7.5 7 6.9 6.9 6.8 7.7 7.2 7.2 8.3 6.4 12 12 10.6 11 11 10.6 10.6 10.7 10.9 10.5 49.6 1/1/2008 2/1/2008 3/1/2008 4/1/2008 5/1/2008 6/1/2008 7/1/2008 8/1/2008 9/1/2008 10/1/2008 11/1/2008 12/1/2008 13/1/2008 14/1/2008 15/1/2008 16/1/2008 17/1/2008 18/1/2008 19/1/2008 20/1/2008 21/1/2008 22/1/2008 66 64.9 51.9 51.1 47 35.2 27 56.8 59 55.7 55.1 56 57.2 57.3 58.6 59.2 57.4 58.1 64.5 66.1 67 66 25.6 26 45 46 52.1 63 70.7 39 38.2 41.2 43.1 40.5 40.8 40 39.3 38.5 40.4 39.6 33.8 30.5 33 31.1 6.3 7.1 2.3 2.6 21 2.4 2.6 1.6 1.4 1.5 1.2 1.4 1.5 1.2 1.5 11 1.1 1.3 1 0.9 0.9 0.9 1.8 1.8 1.7 1.7 1.4 1 0.7 1 1 0.9 0.9 0.9 1 1 1 1 1 1 0.9 0.9 0.9 0.9 11 1 1 23/1/2008 24/1/2008 25/1/2008 26/1/2008 27/12008 28/1/2008 29/1/2008 30/1/2008 31/1/2008 68.2 65.9 67.3 64.8 62.7 62.4 63 62.1 60.1 32.1 32.2 30.3 34.7 37.1 38.3 36.7 36.6 37.1 1 0.9 0.7 0.6 0.6 0.5 0.5 0.2 0.3 1 1.1 1.1 1 0.9 0.8