Instruction 14-13
the Monthly Advertising Expenditures of a Department Store

question 131

Essay

Instruction 14-13
The monthly advertising expenditures of a department store chain (in $1,000,000s) were collected over the last decade. The last 14 months of this time series follows:
$\begin{array}{cc}\text { Month } &\text { Expenditures }\\&(\$)\\1 & 1.4 \\2 & 1.8 \\3 & 1.6 \\4 & 1.5 \\5 & 1.8 \\6 & 1.7 \\7 & 1.9 \\8 & 2.2 \\9 & 1.9 \\10 & 1.9 \\11 & 2.1 \\12 & 2.4 \\13 & 2.8 \\14 & 3.1\end{array}$


-Referring to Instruction 14-13,set up a scatter diagram (i.e.,time-series plot)with months on the horizontal X-axis.

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Definitions:

Indian Rupees

The official currency of India, abbreviated as INR, used as a medium of exchange within the country.

Absolute Purchasing Power Parity

A theory that suggests that in the absence of transaction costs and other barriers, the purchasing power of a currency is the same domestically as it is abroad.

Forward Exchange Rates

The exchange rates at which two parties agree to exchange currencies at a future date.

Interest Rate Parity

A financial theory stating the difference in interest rates between two countries is equal to the expected change in exchange rates between their currencies.