164 Indians CHAPTER 4 REGRESSION MODELS 9 (a) Develop a regression model to predict the price of stock 1 based on the Dow Jones Industrial Average. (b) Develop a regression model to predict the price of stock 2 based on the Dow Jones Industrial Average. KID 4-32 The closing stock price for each of two stocks was recorded over a 12-month period. The clos- ing price for the Dow Jones Industrial Average (DJIA) was also recorded over this same time pe- riod. These values are shown in the following table: STOCK 1 STOCK 2 48.5 48.2 44.5 44.7 49.3 49.3 46.1 46.2 47.7 48.3 47.0 47.9 47.8 MONTH 1 2 3 4 5 6 7 8 9 10 11 12 13 DJIA 11,168 11,150 11,186 11,381 11,679 12,081 12,222 12,463 12,622 12,269 12,354 13,063 13,326 32.4 31.7 31.9 36.6 36.7 38.7 39.5 41.2 43.3 39.4 40.1 42.1 45.2

ENGR.ECONOMIC ANALYSIS
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164
Indians.
CHAPTER 4 REGRESSION MODELS
-9
(a) Develop a regression model to predict the price
of stock 1 based on the Dow Jones Industrial
Average.
(b) Develop a regression model to predict the price
of stock 2 based on the Dow Jones Industrial
Average.
4-32 The closing stock price for each of two stocks
was recorded over a 12-month period. The clos-
ing price for the Dow Jones Industrial Average
(DJIA) was also recorded over this same time pe-
riod. These values are shown in the following table:
STOCK 1
STOCK 2
32.4
31.7
31.9
36.6
36.7
38.7
39.5
41.2
43.3
39.4
40.1
MONTH
1
2
3
4
5
6
7
8
9
10
11
12
13
DJIA
11,168
11,150
11,186
11,381
11,679
12,081
12,222
12,463
12,622
12,269
12,354
13,063
13,326
48.5
48.2
44.5
44.7
49.3
49.3
46.1
46.2
47.7
48.3
47.0
47.9
47.8
42.1
45.2
Transcribed Image Text:164 Indians. CHAPTER 4 REGRESSION MODELS -9 (a) Develop a regression model to predict the price of stock 1 based on the Dow Jones Industrial Average. (b) Develop a regression model to predict the price of stock 2 based on the Dow Jones Industrial Average. 4-32 The closing stock price for each of two stocks was recorded over a 12-month period. The clos- ing price for the Dow Jones Industrial Average (DJIA) was also recorded over this same time pe- riod. These values are shown in the following table: STOCK 1 STOCK 2 32.4 31.7 31.9 36.6 36.7 38.7 39.5 41.2 43.3 39.4 40.1 MONTH 1 2 3 4 5 6 7 8 9 10 11 12 13 DJIA 11,168 11,150 11,186 11,381 11,679 12,081 12,222 12,463 12,622 12,269 12,354 13,063 13,326 48.5 48.2 44.5 44.7 49.3 49.3 46.1 46.2 47.7 48.3 47.0 47.9 47.8 42.1 45.2
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