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MBA,PHD in Psychology
Northwest Florida State College
Jun-1992 - May-1997
Professor
Northwest Florida State College,
Aug-2006 - Nov-2015
Table 3.7 gives data on gold prices, the Consumer Price Index (CPI), and the New York Stock Exchange (NYSE) Index for the United States for the period 1977–1991. The NYSE Index includes most of the stocks listed on the NYSE, some 1500 plus.
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a. Plot in the same scatter gram gold prices, CPI, and the NYSE Index.
b. An investment is supposed to be a hedge against inflation if its price and/or rate of return at least keeps pace with inflation. To test this hypothesis, suppose you decide to fit the following model, assuming the scatterplot in a suggests that this is appropriate:
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