The following attachment contains the values of two different financial stocks d

Question

The following attachment contains the values of two different financial stocks during a one month period. If a linear regression model is used to predict the SAMSUNG stock prices, what is the predicted SAMSUNG value to the nearest dollar when the GOOGLE stock is $840 ?

Date GOOGLE SAMSUNG 2/22/17 829.59 1897.31 2/23/17 830.46 1901.78 2/24/17 848.4 1872.29 2/27/17 852.11 1894.63 2/28/17 848.78 1869.6 3/1/17 847.2 1849.94 3/2/17 845.61 1848.16 3/3/17 845.53 1814.2 3/6/17 843.25 1795.43 3/7/17 838.67 1796.32 3/8/17 835.36 1796.32 3/9/17 831.9 1796.32 3/10/17 827.78 1790.96 3/13/17 829.08 1770.4 3/14/17 830.63 1774.87 3/15/17 835.23 1717.68 3/16/17 823.21 1717.68 3/17/17 829.28 1700.7 3/20/17 828.64 1707.85 3/21/17 831.33 1750.74 3/22/17 830.76 1756.11

Explanation / Answer

## By using R command

> Google=scan("clipboard")
Read 21 items
> Google
[1] 829.59 830.46 848.40 852.11 848.78 847.20 845.61 845.53 843.25 838.67
[11] 835.36 831.90 827.78 829.08 830.63 835.23 823.21 829.28 828.64 831.33
[21] 830.76
> Samsung=scan("clipboard")
Read 21 items
> Samsung
[1] 1897.31 1901.78 1872.29 1894.63 1869.60 1849.94 1848.16 1814.20 1795.43
[10] 1796.32 1796.32 1796.32 1790.96 1770.40 1774.87 1717.68 1717.68 1700.70
[19] 1707.85 1750.74 1756.11
> fit=lm(Samsung~Google)
> fit

Call:
lm(formula = Samsung ~ Google)

Coefficients:
(Intercept) Google  
-1897.840 4.423  

The Predictive model is:

Samsung= -1897.840 + 4.423 *Google

The predicted SAMSUNG value when the GOOGLE stock is $840 is given by

Samsung = -1897.840 + 4.423 *840

= -1897.840 + 3715.32

= 1817.48

The predicted SAMSUNG value when the GOOGLE stock is $840

is $1817

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