The closing stock price for each of two stocks was recorded over a 12-month period. the closing price for the Dow Jones Industrial Average was also recorded over this same time period. These values are shown in the following table: 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. c) Which of the two stocks is most highly correlated to the Dow Jones Industrial Average over this time period? Month DJIA Stock 1 Stock 2

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The closing stock price for each of two stocks was recorded over a 12-month period. the closing price for the Dow Jones Industrial Average was also recorded
over this same time period. These values are shown in the following table:
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.
c) Which of the two stocks is most highly correlated to the Dow Jones Industrial
Average over this time period?
Month DJIA Stock 1
11168
1
2
3
4
5
6
7
8
9
10
11
12
13
11150
11679
48.5
11186 44.5
11381 44.7
48.2
12081
49.3
49.3
12222 46.1
12463 46.2
12622 47.7
12269 48.3
12354 47
13063
13326
47.9
47.8
Stock 2
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
Transcribed Image Text:The closing stock price for each of two stocks was recorded over a 12-month period. the closing price for the Dow Jones Industrial Average was also recorded over this same time period. These values are shown in the following table: 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. c) Which of the two stocks is most highly correlated to the Dow Jones Industrial Average over this time period? Month DJIA Stock 1 11168 1 2 3 4 5 6 7 8 9 10 11 12 13 11150 11679 48.5 11186 44.5 11381 44.7 48.2 12081 49.3 49.3 12222 46.1 12463 46.2 12622 47.7 12269 48.3 12354 47 13063 13326 47.9 47.8 Stock 2 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
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