QUESTION 4

1. A eurozone citizen observes the spot rate between euros and pounds is currently £1.04/€. Assume the expected inflation rates over the course of the year in the eurozone and the UK are 3% and 2%, respectively. Suppose the spot rates for euros and pounds at the end of the year are as follows:

   $1.15/€, $1.11/£

   Which of the following statements is true according to relative PPP?

   		The euro appreciated in real terms.
   		The pound appreciated in real terms.
   		Neither the euro nor the pound appreciated in real terms.
   		Cannot be determined.

QUESTION 6

1. Use the following information to answer the next two questions.

   Investors expect inflation rates over the next twelve months in the US and Japan to be 8% and 3%, respectively.  The current exchange rates for the two currencies are as follows:

   C$.007/¥,   C$1.02/$

   Suppose that twelve months from now, the exchange rate between US dollars and yen is $.0071/¥.  According to relative PPP, what be theimpact of this new exchange rate on the US balance of trade?  (Assume the US is the home country and ignore any possible feedback loop.)Round intermediate steps to four decimals.

   		The US BOT will increase.
   		The US BOT will decrease.
   		The US BOT will not be affected.
   		Cannot be determined.

Terlingua Transportation Co. (TTC) is a regional shipper. It is most cost efficient for the company’s diesel fuel trucks to refuel at retail outlets along the shipping routes. However, retail prices tend to be volatile. Hence, managers at TTC have decided to hedge future retail purchases of fuel by means of New York Harbor ULSD (ultra low sulphur diesel) futures contracts. Each contract has 42,000 gallons as the underlying asset. You are a financial analyst for TTC. Today is April. Your immediate task is to hedge the price risk of diesel future purchases in three months (i.e., in July). You expect that TTC trucks will need to buy a total of 700,000 gallons of diesel fuel in July. You plan to apply dynamic hedging. Based on calculations for a 3-month hedge, you determine that your company needs to take a long position in 20 of the August futures contracts today. Time passes. Today now is May. Forecast for quantity of the July purchase of diesel fuel is unchanged. You plan to continue hedging with August contracts. You have the following statistical data. All spot prices are retail prices for diesel fuel. All futures prices are for the New York Harbor ULSD futures. Standard deviations are in cents per gallon. standard deviation of 1-month changes in spot prices: 14 standard deviation of 2-month changes in spot prices: 24 standard deviation of 3-month changes in spot prices: 34 standard deviation of 1-month changes in futures prices: 15 standard deviation of 2-month changes in futures prices: 27 standard deviation of 3-month changes in futures prices: 36 1-month correlation between spot and futures prices: 1.10 2-month correlation between spot and futures prices: 1.17 3-month correlation between spot and futures prices: 1.23 In your calculations for optimal number of futures contracts, you optimize using the formulas for cross hedging. Calculate the change in optimal number of futures contracts that your company should be long. Report the change as an integer value. If you decrease the number of contracts, report a negative number. (When you calculate the new value for N*, round to the nearest integer.)

tudies have shown that people who suffer sudden cardiac arrest (SCA) have a better chance of survival if a defibrillator is administered very soon after cardiac arrest. How is survival rate related to the time between when cardiac arrest occurs and when the defibrillator shock is delivered? This question is addressed in the paper “Improving Survival from Sudden Cardiac Arrest: The Role of Home Defibrillators” (by J.K. Stross, University of Michigan, February 2002). The accompanying data give y = survival rate (percent) and x = mean call-to-shock time (minutes) for a cardiac rehabilitative center (where cardiac arrests occurred while victims were hospitalized and so the call-to-shock time tended to be short) and for four communities of different sizes.

Do the following by hand and on Minitab.

Construct a scatter plot.

Calculate the Pearson correlation coefficient.

Determine equation of least squares line that can be used for predicting a value of y based on a value of x.

Compute SSE =  ( y  yˆ)2 for the least squares line.

Why do we call the least squares line the “best fitting line”?

tudies have shown that people who suffer sudden cardiac arrest (SCA) have a better chance of survival if a defibrillator is administered very soon after cardiac arrest. How is survival rate related to the time between when cardiac arrest occurs and when the defibrillator shock is delivered? This question is addressed in the paper “Improving Survival from Sudden Cardiac Arrest: The Role of Home Defibrillators” (by J.K. Stross, University of Michigan, February 2002). The accompanying data give y = survival rate (percent) and x = mean call-to-shock time (minutes) for a cardiac rehabilitative center (where cardiac arrests occurred while victims were hospitalized and so the call-to-shock time tended to be short) and for four communities of different sizes.

Do the following by hand and on Minitab.

Construct a scatter plot.

Calculate the Pearson correlation coefficient.

Determine equation of least squares line that can be used for predicting a value of y based on a value of x.

Compute SSE =  ( y  yˆ)2 for the least squares line.

Why do we call the least squares line the “best fitting line”?

tudies have shown that people who suffer sudden cardiac arrest (SCA) have a better chance of survival if a defibrillator is administered very soon after cardiac arrest. How is survival rate related to the time between when cardiac arrest occurs and when the defibrillator shock is delivered? This question is addressed in the paper “Improving Survival from Sudden Cardiac Arrest: The Role of Home Defibrillators” (by J.K. Stross, University of Michigan, February 2002). The accompanying data give y = survival rate (percent) and x = mean call-to-shock time (minutes) for a cardiac rehabilitative center (where cardiac arrests occurred while victims were hospitalized and so the call-to-shock time tended to be short) and for four communities of different sizes.

Do the following by hand and on Minitab.

Construct a scatter plot.

Calculate the Pearson correlation coefficient.

Determine equation of least squares line that can be used for predicting a value of y based on a value of x.

Compute SSE =  ( y  yˆ)2 for the least squares line.

Why do we call the least squares line the “best fitting line”?

tudies have shown that people who suffer sudden cardiac arrest (SCA) have a better chance of survival if a defibrillator is administered very soon after cardiac arrest. How is survival rate related to the time between when cardiac arrest occurs and when the defibrillator shock is delivered? This question is addressed in the paper “Improving Survival from Sudden Cardiac Arrest: The Role of Home Defibrillators” (by J.K. Stross, University of Michigan, February 2002). The accompanying data give y = survival rate (percent) and x = mean call-to-shock time (minutes) for a cardiac rehabilitative center (where cardiac arrests occurred while victims were hospitalized and so the call-to-shock time tended to be short) and for four communities of different sizes.

Do the following by hand and on Minitab.

Construct a scatter plot.

Calculate the Pearson correlation coefficient.

Determine equation of least squares line that can be used for predicting a value of y based on a value of x.

Compute SSE =  ( y  yˆ)2 for the least squares line.

Why do we call the least squares line the “best fitting line”?

Calculate r2 using the following formula: r 2

  ( y  y)2   ( y  yˆ)2

Interpret the r2 value.

Using your equation in part c, draw the least squares line on the scatterplot you constructed in part a.

Use your prediction equation to predict SCA survival rate for a community with a mean call-to-shock time of 5 min.

update I have finished 1-5 6-9 are stumping me

"Durham Police is to become the first force in the country (UK) to introduce a scheme in which users are treated with diamorphine - medical grade heroin.
Ron Hogg, County Durham's Police, Crime and Victims' Commissioner, says such treatment lowers offending levels.
Opponents claim trials have not shown significant benefits.
Mr Hogg told BBC Newcastle existing national policies had not been effective and pointed to six-year trials in Darlington, London and Brighton which he said had helped wean users off the drug.
Addicts were given the opiate in consumption rooms, often referred to as "shooting galleries", supervised by medical professionals.
"It got them back into a normal life and it cut crime," he said.
"We saw health benefits for the individuals, we saw needles being taken off the street, so there's an awful lot of evidence both in the UK and across the world that such schemes do actually work.
"All police and crime commissioners spend a lot of money on what we call diversionary work - community projects and youth offending schemes - because we know this will stop people committing crime.
"This is just an extension of that rationale. The controversiality is because it's drugs."
'Not unusual'
Mr Hogg said the UK had the highest rate of heroin, cocaine and ecstasy use across the European Union with drug-induced deaths totalling 45 people per million compared with 17 per million in the EU.
Aiming to introduce the scheme "by the end of this year", he added the force's public health partners were working out the cost of administering the drug to users twice-daily.
He previously mooted such a move in 2013.

"If we go back to the 1960s, doctors used to prescribe heroin as a means of treating someone back to recovery. It's not that unusual," he said.
"We've got to consider the Misuse of Drugs Act has been in since 1971 and we haven't arrested the way out of the problem, have we?"
A Home Office spokesman said there was evidence "supervised use of [diamorphine] in a medical environment as part of a treatment plan can help keep patients in treatment and out of criminal behaviour".
However, David Raynes of the National Drug Prevention Alliance, warned the move "will not stop addicts being addicts".
"It doesn't stop people using street drugs," he said.
"It may reduce crime marginally, but it doesn't reduce crime permanently."

Working together as a group, design a study to address whether this method is effective or not in reducing crime due to heroin addiction. Ron Hogg of County Durham's Police believes it works while David Raynes of the National Drug Prevention Alliance is skeptical. Your job is to help settle the argument using a statistical study. You will need to address the following in your write up:

1 What is the population of interest?

2 What are the null and alternate hypotheses of your study?

3 What data type will you be collecting in this study (numerical or categorical)?

4 How would you collect the data needed to decide which hypothesis to support?

5 How would you make sure the data collected is representative of the population of interest and not biased?

6 Specifically, what tools would you use to analyze the data? You need to give the names of any plots/graphs that would be useful and the type of hypothesis test that would be used to settle the argument between Mr. Hogg and Mr. Raynes.

7 Based on what hypothesis test you selected in part 6, what assumptions need to be check prior to using said test?

8 Let's assume your study resulted in the data being statistically significant. Which hypotheses would have been supported? Give a possible p-value for this result. If an error had occurred, which type (Type I or Type II) could it have been?

9 Let's assume your study resulted in the data NOT being statistically significant. Which hypotheses would have been supported? Give a possible p -value for this result. If an error had occurred, which type (Type I or Type II) could it have been?

The nurse prepares to discuss the changes in how the JNC 7 defines hypertension. What ranges and descriptions should the nurse include?

4. Compare physiological, pathophysiological and clinical changes in patients with Parkinson’s and Alzheimer’s Disease during three years of follow-up.

Mention three different aspects that reflect important changes for individuals who fill out their tax report in Puerto Rico.