Complete problems 1.6, 1.7, and 1.8 and submit to your instructor. Complete your assignment in Excel and submit your completed Excel workbook to your Instructor for grading.

1.6. Table 1-2 gives data on the Consumer Price Index (CPI), S&P 500 stock index, and three-month Treasury bill rate for the United States for the years 1980-2007.

1. Plot these data with time on the horizontal axis and the three variables on the vertical axis. If you prefer, you may use a separate figure for each variable.
2. What relationships do you expect to find between the CPI and the S&P index and between the CPI and the three-month Treasury bill rate? Why?
3. For each variable, “eyeball” a regression line for the scattergram.

1.7. Table 1-3 gives you data on the exchange rate between the U.K. pound and the U.S. dollar (number of U.K. pounds per U.S. dollar) as well as the consumer price indexes in the two countries for the period 1985-2007.

1. Plot the exchange rate (ER) and the two consumer price indexes against time, measured in years.
2. Divide the U.S. CPI by the U.K. CPI and call it the relative price ration (RPR).
3. Plot ER against RPR.
4. Visually sketch a regression line through the scatterpoints.

1.8. Table 1-4 on the textbook Web site contains data 1247 cars from 2008. Is there a strong relationship between a car’s MPG (miles per gallon) and the number of cylinders it has?

1. Create a scatterplot of the combined MPG for the vehicles based on the number of cylinders.
2. Sketch a straight line that seems to fit the data.
3. What type of relationship is indicated by the plot?