FE5056QA Compute the coefficient of Determination? Would you recommend the regression model for the purpose of estimation?

Problem Solving - Methods and Analysis

Instruction:

There are 2 parts (both mandatory) as below:
1. Prepare a research proposal as per given guidelines
2. Perform data analysis and report your results as per given guidelines

Content: relevance, focus and coverage

Reading and Research: demonstration of independent reading that includes scholarly refereed journal articles and use of a range of sources
Format, Structure and/or Use of relevant tables, graphs and data: clear, neat, within word limits, logic

Quality of argument: evidence of understanding, judgement, originality, logic and synthesis, critical thinking, analysis and exposition
Quality of communication: language and clarity; bibliography and referencing; Harvard referencing system.

Part 1: Research proposal
It should include the following sub-headings:

Title:

This should represent the content of your proposal.

Research topic:

You have to briefly explain your research topic and why it is relevant. It may be a problem which needs a solution or a question which needs an answer or a theory which needs further development.

Literature review:

Discuss the literature relevant to your research topic and reference them (in Harvard format). A minimum of 5 references are needed. Explain how your topic fits in the debate. Explain how your topic will contribute to the existing literature.

Proposed data type and collection techniques:

Explain whether you plan to use primary or secondary data. Also elaborate on the source of the data and the proposed collection techniques which will be used to obtain the data.

Proposed methodology:

Explain your research design, the proposed methodology and the reason for choosing the same.

Part 2: Data analysis

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)

 

Date

Dow Jones

S&P 500

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

Question 1. Develop a scatter diagram for these data and interpret the same.

Question 2. Compute the sample correlation coefficient for these data.

Question 3. Are they poorly correlated, or do they have a close association?

Question 4. Develop the least squares estimated regression equation

Question 5. Compute the coefficient of Determination? Would you recommend the regression model for the