Relation between the inflation and the fund made up of precious metals.
Explanation of Solution
The precious metals include gold, silver, platinum, and others in the economy. The fund made up of these metals is traditionally known as the best measure against the inflation. If the assumption is true, there will be a strong positive relationship between the inflation rate and the demand for funds made up of precious metals. In order to see the relation between the two, the monthly
Through analyzing the pattern of the plots, it shows that there is no linear relationship identified between the inflation rate in the economy and the demand for the fund made up of precious metals.
Scatter diagram: The scatter diagram is a graphical representation of values of two variables plotted along the two axes. The pattern between the resulting plotted points reveals whether there is any relation between the two variables or not.
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Statistics for Management and Economics (Book Only)
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