2. 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).must be solved on excelDateDJIAS&PJanuary 6123601278January 13124221289January 20127201315January 27126601316February 3128621345February 10128011343February 17129501362February 24129831366March 2129781370March 9129221371March 16132331404March 23130811397March 30132121408April 5130601398April 13128501370a. Develop a scatter diagram with DJIA as the independent variable.b. Develop the estimated regression equation.c. Test for a significant relationship. Use α=0.05.

a) Excel Procedure: Enter the data for S&P and DJIA in Excel sheet>Select the columns of S&P and DJIA> Insert>“Insert scatter or bubble chart” option>Scatter under Charts. Excel Output: b) Excel Procedure: Enter S&P and DJIA in Excel>Data>Data Analysis> ‘Regression’>Select S&P under ‘Input Y Range’>Select DJIA under ‘Input X Range’>Click on ‘OK’. Output: From the output, The regression equation is -669.0212+0.1573 DJIA. c. Null Hypothesis: H0: There is no significant relationship between S&P and DJIA. Alternative Hypothesis: H0: There is a significant relationship between S&P and DJIA. From the output, the p value corresponding with F value is 0.0000. Decision Rule: If p-value ≤ α, then reject the null hypothesis. Conclusion: The level of significance is α=0.05 Here, the p-value is less than the level of significance. From the decision rule, reject the null hypothesis. Conclusion: There exists a significant relationship between S&P and DJIA

Answered: The Dow Jones Industrial Average (DJIA)…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

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2. 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).

must be solved on excel

Date	DJIA	S&P
January 6	12360	1278
January 13	12422	1289
January 20	12720	1315
January 27	12660	1316
February 3	12862	1345
February 10	12801	1343
February 17	12950	1362
February 24	12983	1366
March 2	12978	1370
March 9	12922	1371
March 16	13233	1404
March 23	13081	1397
March 30	13212	1408
April 5	13060	1398
April 13	12850	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 α=0.05.

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