Problem 2.1 Examine the Excel data file provided to determine the range of cells with the relevant observations. Import the Excel data by using an R package i.e. readxl.

Problem 2.2 Adjust for any missing or erroneous data. To preserve the structure of the variables, R represents most missing or erroneous data with a special NA value. Normal R arithmetic operations yield in NAs when operands are NAs. To avoid this from happening, create a temporary dataset and remove the NAs from the data by using na.omit.

Problem 2.3 Rename the following variables in the dataset: shsOut for shares outstanding, clsgPrice for closing price, and pE for price-to-earning (P/E) ratio. Create two additional variables: for the natural logarithm of the market value of equity (or market capitalization) called lnSize from shsOut and clsgPrice, and for the earnings-to-price (E/P) ratio, which is the inverse of the P/E ratio called eP. Plot the data in a histogram to visualize the distribution of the lnSize and eP variables.

Problem 2.4 Calculate the following basic descriptive statistics for lnSize and eP in this sample data: (a) measures of location and central tendency: mean and median, (b) measures of scale or dispersion: variance and standard deviation, and interquartile range and (c) measure of distribution or shape: percentile i.e. 5%, 25%, 50%, 75%, and 95%.

Problem 2.5 Outliers are data values that are dramatically different from patterns in the rest of the data, i.e., 3 standard deviations away from their mean.
(a) Plot a box plot and identify any presence of outliers.
(b) To confirm the results of the box plot, calculate the number of outliers for lnSize and eP, create two new columns that can differentiate the outliers and non-outliers (i.e. keep the non-outliers as the original observations but replace the outliers as missing), and make the box plots and histograms again for the new columns.

Problem 2.6 Calculate the z-score for each of the variables, plot the results, and explain the reason for standardizing factor exposures.

Problem 2.1 Examine the Excel data file provided to determine the r...