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, is stored in the data set DJIAS&P500 (Barron's website, April 17, 2012).

a)Develop a scatter diagram with DJIA as the independent variable.

b)Develop the estimated regression equation.

c)Test for a significant relationship. Use .

d)Did the estimated regression equation provide a good fit? Explain.

e)Suppose that the closing price for DJIA is 13,500. Predict the closing price for the S&P 500.

Date DJIA S&P

Jan. 6 12360 1278

Jan 13 12422 1289

Jan. 20 12720 1315

Jan. 27 12660 1316

Feb. 3 12862 1345

Feb. 10 12801 1343

Feb. 17 12950 1362

Feb. 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