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 d. Did the estimated regression equation provide a good fit? Explain. c. 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?
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 d. Did the estimated regression equation provide a good fit? Explain. c. 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
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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