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Modelling and Drawing Equations from Data

The data in DJIA.xls (ExcelDataFiles) represents the closing value of the Dow Jones Industrial Average (DJIA) over the 29-year period from 1979 to 2007.

Year | Coded Year | DJIA
1979 | 0 | 838.7
1980 | 1 | 964.0
1981 | 2 | 875.0
1982 | 3 | 1046.5
1983 | 4 | 1258.6
1984 | 5 | 1211.6
1985 | 6 | 1546.7
1986 | 7 | 1896.0
1987 | 8 | 1938.8
1988 | 9 | 2168.6
1989 | 10 | 2753.2
1990 | 11 | 2633.7
1991 | 12 | 3168.8
1992 | 13 | 3301.1
1993 | 14 | 3754.1
1994 | 15 | 3834.4
1995 | 16 | 5117.1
1996 | 17 | 6448.3
1997 | 18 | 7908.3
1998 | 19 | 9181.4
1999 | 20 | 11497.1
2000 | 21 | 10788.0
2001 | 22 | 10021.5
2002 | 23 | 8341.6
2003 | 24 | 10453.9
2004 | 25 | 10788.0
2005 | 26 | 10717.5
2006 | 27 | 12463.2
2007 | 28 | 13264.8

1. Find a linear trend equation to these data. X = 0 represents 1979.
a) Y =-112.33952 + 474.7758X
b) Y=1123.3952 + 474.7758X
c) Y=-1123.3952 + 474.7758X

2. Find a quadratic equation to these data. X = 0 represents 1979.
a) Y = 310:5601 + 156.1190X +11.3806X^2
b) Y = 310:5601 + 156.1190X^2 + 11.3806X
c) Y = -310:5601 + 156.1190X +11.3806X^2

3. Find an exponential equation to these data. X=0 represents 1979.
a) ln Y = 2.9254 + 0.0469X
b) log10 Y=2.9254+0.0469x
c) Y = 2.9254 + 0.0469X

4. Which model appears to be the most appropriate?
a) Linear trend model
b) Quadratic trend
c) Exponential trend model

5. Using the most appropriate model as you selected in 4), forecast the closing value for 2008.
a) 13119:8788
b) 15236:6701
c) 19297:45336

Solution Summary

The expert examines modeling and drawing equations from data.

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