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The daily prices over a selected period for shares in Aarons Adventures and Bradleys Boats (A and B) have been recorded Date A B 12/30/2016

The daily prices over a selected period for shares in Aarons Adventures and Bradleys Boats (A and B) have been recorded

Date A B
12/30/2016 3.963 46.56321
12/29/2016 4.113 47.00238
12/28/2016 4.333 47.83733
12/27/2016 4.567 48.04992
12/26/2016 5.067 49.02335

a) Calculate the daily returns of shares A and B, and make an appropriate graph of the pairs of daily returns. Include all relevant labels to make your graph clear.(How to do this on excel?)

b) State the Pearsons correlation coefficient for these daily returns. You do not need to show any work for this part.

c) Explain what your result in part b) means with reference to your graph in part a).

d) 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 your chosen method would preserve your chosen features.

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