The Dow Jones Industrial Average (DJIA) and the Standard & Poors 500 (S&P500) 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 is a better measure of stock market performance because it is broader based. The closing prices for the DJIA and S&P500 for 20 weeks starting on 9/9/2005 are included in cells E1 to G21. The DJIA data is in cells F1 to F21 and the data for S&P 500 is in cells G1 to G21. Both data sets have labels in first row. Develop the estimated regression equation using DJIA as the independent variable. Place output in cell H1 Is the relationship between DJIA and S&P500 significant using alpha .05? Did the estimated regression equation provide a good fit? (explain) Suppose that the closing price for DJIA is 11,000. Estimate the closing price for the S&P500 Date DJIA S&P500 9-Sep 10679 1241 16-Sep 10642 1238 23-Sep 10420 1215 30-Sep 10569 1229 7-Oct 10292 1196 14-Oct 10287 1187 21-Oct 10215 1180 28-Oct 10403 1198 4-Nov 10531 1220 11-Nov 10686 1235 18-Nov 10766 1248 25-Nov 10932 1268 2-Dec 10878 1265 9-Dec 10779 1259 16-Dec 10876 1267 23-Dec 10883 1269 30-Dec 10718 1248 6-Jan 10959 1285 13-Jan 10960 1288 20-Jan 10667 1261

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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The Dow Jones Industrial Average (DJIA) and the Standard & Poors 500 (S&P500) 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 is a better measure of stock market performance because it is broader based. The closing prices for the DJIA and S&P500 for 20 weeks starting on 9/9/2005 are included in cells E1 to G21. The DJIA data is in cells F1 to F21 and the data for S&P 500 is in cells G1 to G21. Both data sets have labels in first row.
Develop the estimated regression equation using DJIA as the independent variable. Place output in cell H1
Is the relationship between DJIA and S&P500 significant using alpha .05?
Did the estimated regression equation provide a good fit? (explain)
Suppose that the closing price for DJIA is 11,000. Estimate the closing price for the S&P500
Date	DJIA	S&P500
9-Sep	10679	1241
16-Sep	10642	1238
23-Sep	10420	1215
30-Sep	10569	1229
7-Oct	10292	1196
14-Oct	10287	1187
21-Oct	10215	1180
28-Oct	10403	1198
4-Nov	10531	1220
11-Nov	10686	1235
18-Nov	10766	1248
25-Nov	10932	1268
2-Dec	10878	1265
9-Dec	10779	1259
16-Dec	10876	1267
23-Dec	10883	1269
30-Dec	10718	1248
6-Jan	10959	1285
13-Jan	10960	1288
20-Jan	10667	1261

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