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 excelDate DJIA S&P January 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. Using Excel, we can draw scatter plot as follows, Enter the data in Excel spreadsheet and select it. Go to Insert->scatter-> select 1st scatter plot We get scatter plot as follows, b. To find regression equation, we can perform regression analysis using excel as follows, Go to Data-> Data analysis->Regression->select input range X as DJIA and y as S&P. tick on label and confidence interval is 95%. Select output range-> ok we get result as follows, From the above result, we get the estimated regression equation as, y^=0.1573x-669.02c. The null and alternative hypothesis is, H0: There is no significant relationship between variables. Ha: There is significant relationship between variables. From the above result, we get the value of fcal=239.89 > fc=0.00, we reject H0 at 0.05 level of significance. Hence, we can conclude that there is significant relationship between variables DJIA and S&P.

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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