Written Assignment: Assignment 3 (weight 30%) This assignment consist of case study/report writing and short questions/calculations Q1: Case study/report writing (20%): In recent years Australian export and import prices have shown dramatic trends as shown by export and import price indices. Export and import price indices measure the overall change in the prices of goods and services exported or imported respectively. The prices of all goods and services do not change at the same rate. A price index thus summarizes their movements by averaging over them. A price index assumes a value of unity, or 100, in some reference period. Table 1 presents quarterly export and import price indices for 2000 to 2015 (see, the attached file entitled Assignment 2 ABS-Data.xlsx). Your task is to write a report (about 1500 words): (a) Convert (using Excel or manually) quarterly export and import price indices data into yearly (Hint: first add quarterly data for each year and then divide it by four because there are four quarters in a year); (b) Discuss which is the most appropriate graph to present this statistics and then present it in a graph(s); (c) Discuss emerging trends in Australian export and import prices in the last few years; (d) Explain why this trend may have occurred in recent years (Hints: for this part you need to look at Australian trade data from the Australian Bureau of Statistics (ABS) site (www.abs.gov.au) or do some research on the net as to what kind of goods and services Australia exports and imports and what has happened to their exports and imports in recent times). (e) What would be the implications of this trend for Australian business? Discuss. Note: For this question you are required to present your answer in a report form. Your written report should have a cover page with your name, student number and an abstract of your answers (4-5 lines). In the next pages, you should have an introduction (5-10 lines), main body of the report (where you discuss/answer all five questions analyticallyabout 2 pages) and then a conclusion of your report (10-15 lines). Finally, you should have a reference section if you have taken material or idea from any published or unpublished sources. Each question is worth 4 marks. Q2: Short questions (10%): Rising price level, as measured by the rate of inflation, reduces people purchasing power. For this reason, investors tend to invest in high return shares. Table 2 provides a dataset from 1995- 2015 for both All-Ordinary Index (Y) and inflation (X). See the attached file containing data on All-Ordinary Index and inflation. Based on this dataset answer the following questions:(a) Calculate covariance between X and Y, and the coefficient of correlations (b) What does these statistics tell you about the relationship between All-Ordinary Index and inflation? (c) Determine the least square line. (d) Determine the coefficient of determination R2 Each question is worth 4 marks.