g power parity (PPP) implies that exchange rate movements should mirror relative price movements between countries in the long run. PPP holds if exchange rate or relative prices adjust negatively to deviations between exchange rates and relative prices. Using 147 annual observations between the U.S. and the U.K. from 1871 to 2017, recent research finds an adjustment of -0.19 with a sample standard deviation of 0.692. 1.Based on the research evidence, test if PPP holds at a 3% significance level. Please show the full workings and justify the decision. 2.If the adjustment value is -0.15, what is the probability of rejecting the null when it is false? Please show the full workings and explain the concept. Please give me more details I would appriciate it
g power parity (PPP) implies that exchange rate movements should mirror relative price movements between countries in the long run. PPP holds if exchange rate or relative prices adjust negatively to deviations between exchange rates and relative prices. Using 147 annual observations between the U.S. and the U.K. from 1871 to 2017, recent research finds an adjustment of -0.19 with a sample standard deviation of 0.692. 1.Based on the research evidence, test if PPP holds at a 3% significance level. Please show the full workings and justify the decision. 2.If the adjustment value is -0.15, what is the probability of rejecting the null when it is false? Please show the full workings and explain the concept. Please give me more details I would appriciate it
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Purchasing power parity (PPP) implies that exchange rate movements should mirror relative price movements between countries in the long run. PPP holds if exchange rate or relative prices adjust negatively to deviations between exchange rates and relative prices. Using 147 annual observations between the U.S. and the U.K. from 1871 to 2017, recent research finds an adjustment of -0.19 with a sample standard deviation of 0.692.
1.Based on the research evidence, test if PPP holds at a 3% significance level. Please show the full workings and justify the decision.
2.If the adjustment value is -0.15, what is the probability of rejecting the null
when it is false? Please show the full workings and explain the concept.
Please give me more details I would appriciate it
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