58. The Dow Jones Industrial Average (DJIA) and the Standard & Poor's 500 (S&P 500) indexes are used as measures of overall movement in the stock market. The DJIA is based on the price movements of 30 large companies; the S&P 500 is an index composed of 500 stocks. Some say the S&P 500 is a better measure of stock market performance because it is broader based. The closing price for the DJIA and the S&P 500 for 15 weeks, beginning with January 6, 2012, follow (Barron's website, April 17, 2012). Date DJIA S&P January 6 January 13 January 20 January 27 February 3 February 10 February 17 February 24 March 2 March 9 March 16 March 23 March 30 April 5 April 13 12,360 12,422 12,720 12,660 12,862 12,801 12,950 12,983 12,978 12,922 13,233 13,081 13,212 13,060 12,850 1278 1289 1315 1316 1345 1343 1362 1366 1370 1371 1404 1397 1408 1398 1370 a. Develop a scatter diagram with DJIA as the independent variable. b. Develop the estimated regression equation. c. Test for a significant relationship. Use a = .05. d. Did the estimated regression cquation provide a good fit? Explain. e. Suppose that the closing price for the DJIA is 13,500. Predict the closing price for the S&P 500. f. Should we be concerned that the DJIA value of 13,500 used to predict the S&P 500 value in part (e) is beyond the range of the data used to develop the estimated regres- sion equation?
58. The Dow Jones Industrial Average (DJIA) and the Standard & Poor's 500 (S&P 500) indexes are used as measures of overall movement in the stock market. The DJIA is based on the price movements of 30 large companies; the S&P 500 is an index composed of 500 stocks. Some say the S&P 500 is a better measure of stock market performance because it is broader based. The closing price for the DJIA and the S&P 500 for 15 weeks, beginning with January 6, 2012, follow (Barron's website, April 17, 2012). Date DJIA S&P January 6 January 13 January 20 January 27 February 3 February 10 February 17 February 24 March 2 March 9 March 16 March 23 March 30 April 5 April 13 12,360 12,422 12,720 12,660 12,862 12,801 12,950 12,983 12,978 12,922 13,233 13,081 13,212 13,060 12,850 1278 1289 1315 1316 1345 1343 1362 1366 1370 1371 1404 1397 1408 1398 1370 a. Develop a scatter diagram with DJIA as the independent variable. b. Develop the estimated regression equation. c. Test for a significant relationship. Use a = .05. d. Did the estimated regression cquation provide a good fit? Explain. e. Suppose that the closing price for the DJIA is 13,500. Predict the closing price for the S&P 500. f. Should we be concerned that the DJIA value of 13,500 used to predict the S&P 500 value in part (e) is beyond the range of the data used to develop the estimated regres- sion equation?
MATLAB: An Introduction with Applications
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ISBN:9781119256830
Author:Amos Gilat
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Chapter1: Starting With Matlab
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Transcribed Image Text:58. The Dow Jones Industrial Average (DJIA) and the Standard & Poor's 500 (S&P 500)
indexes are used as measures of overall movement in the stock market. The DJIA is based
on the price movements of 30 large companies; the S&P 500 is an index composed of 500
stocks. Some say the S&P 500 is a better measure of stock market performance because it
is broader based. The closing price for the DJIA and the S&P 500 for 15 weeks, beginning
with January 6, 2012, follow (Barron's website, April 17, 2012).
Date
DJIA
S&P
January 6
January 13
January 20
January 27
February 3
February 10
February 17
February 24
March 2
12,360
12,422
12,720
12,660
12,862
12,801
1278
1289
1315
1316
1345
DATA File
1343
12,950
12,983
1362
DJIAS&P500
1366
12,978
12,922
1370
March 9
March 16
1371
13,233
13,081
13,212
13,060
12,850
1404
March 23
March 30
April 5
April 13
1397
1408
1398
1370
a. Develop a scatter diagram with DJIA as the independent variable.
b. Develop the estimated regression equation.
c. Test for a significant relationship. Use a = .05.
d. Did the estimated regression equation provide a good fit? Explain.
e. Suppose that the closing price for the DJIA is 13,500. Predict the closing price for the
S&P 500.
f. Should we be concerned that the DJIA value of 13,500 usced to predict the S&P 500
value in part (e) is beyond the range of the data used to develop the estimated regres-
sion equation?
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