Question

question 8 of 13
the table below represents the closing prices of stock abc for the last five days. using your calculator, what is the equation of linear regression that fits these data?
day value
1 24.31
2 23.31
3 23.01
4 23.16
5 23.27
a. y = -0.237x + 25.139
b. y = -0.223x + 24.081
c. y = -0.147x + 19.217
d. y = 0.194x - 24.815

Explanation:

Step1: Recall linear - regression formula

The equation of a line is $y = mx + b$, where $m$ is the slope and $b$ is the y - intercept. Most calculators have a linear - regression function (e.g., on a TI - 84 Plus: STAT -> CALC -> LinReg(ax + b)).

Step2: Input data into calculator

Enter the days (1, 2, 3, 4, 5) as the x - values and the stock values (24.31, 23.31, 23.01, 23.16, 23.27) as the y - values into the calculator's list editor.

Step3: Calculate regression coefficients

Use the LinReg(ax + b) function on the calculator. The calculator will output the values of $a$ (the slope $m$) and $b$ (the y - intercept).
After performing the linear - regression calculation on a calculator, we get $m\approx - 0.223$ and $b\approx24.081$. So the equation of the linear regression is $y=-0.223x + 24.081$.

Answer:

B. $y=-0.223x + 24.081$