Question 4.152

54. Darts and the Dow Jones. Refer to your work from Exercise 39. For parts (a)−(c), if appropriate, use your regression equation to estimate the Darts stock returns based on the following values of the Dow Jones Industrial Average. If it is not appropriate, clearly state why not.

  1. 8
  2. 20
  3. −10
  4. Calculate the prediction error for your prediction in part (a). Does this data point lie above or below the regression line, and what does that mean?