Question

Consider the daily percent changes of McDonald’s stock price and those of the Dow Jones Industrial Average for trading days in the months of July and August 2014. (obtain all graphs and calculations from excel, but provide manual calculations):

1. Find the 95% confidence interval for the slope coefficient b1 (so-called bet
2. Test at the 5% level of significance to see whether or not the daily percent changes of McDonald’s and of the Dow Jones Index are significantly associated (in short, is B1 significant)
3. Find the 95% prediction interval for the percent changes in McDonald’s stock on a day in which the Dow Jones Index is up 1.5%
4. Find the 95% confidence interval for the mean percent change in McDonald’s stock for the idealized population of all days in which the Dow Jones index is up 1.5%

MCD	DJIA
1.12	0.47
-0.29	1.41
0.83	0.7
0.58	0.69
-0.52	-0.69
0.2	-1.38
-0.12	-2.34
1.16	1.44
0.1	-0.24
0.53	0.47
0.52	-1.18
-0.89	-1.19
-0.8	0.72
0.09	0.72
0.07	0.95
0.54	0.94
0.35	0.93
1.04	0.92
0.78	0.92
1.1	0.45
0.18	0.23
-0.58	-1.35
-0.41	-1.14
0.78	2.08
1.07	3.17
-0.09	-0.66
1.69	1.99
1.69	3.03
-0.42	-0.84
0.83	1.48
-0.23	-0.63
0.56	2.31
-1.7	-0.21
0.42	-2.06
1.54	0.84
0.1	0
-0.46	-2.08
0.94	2.34
0.76	-0.21
-0.99	-1.67
-1.33	-2.33
0.89	1.08

Answer 1