Part 2: Data analysis (40marks)
Using any data analysis tool of your choice, examine the case-study and answer the questions below:
The Dow Jones Industrial Average (DJIA) and the Standard & Poor (S&P) 500 Index are both 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 10 weeks, beginning with
February 11,2000 are shown (Barron’s April 17, 2000)
Dow Jones S&P 500
Date
11-Feb 10425 1387
18-Feb 10220 1346
25-Feb 9862 1333
31-Mar 10367 1409
10-Mar 9929 1395
17-Mar 10595 1464
24-Mar 11113 1527
31-Mar 10922 1499
7-Apr 11111 1516
14-Apr 10306 1357
Note: Consider DJIA as the independent variable
1. Develop a scatter diagram for these data and interpret the same.
2. Compute the sample correlation coefficient for these data.
3. Are they poorly correlated, or do they have a close association?
4. Develop the least squares estimated regression equation
5. Compute the coefficient of Determination? Would you recommend the regression model for the purpose of estimation?
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
