NYSE Utility

In this project we are going to compare the difference between using a quadratic function and an exponential function to predict the highest close by year of the New York Stock Exchange (NYSE) Utility Index. The table below gives the highest close of the utility index for the NYSE for each year. You will need to determine the highest close of the utility index for all years from 1997 up to this year (but not including this year) and add these points to your data set before making your scatterplot. To access this information go here and choose the NYSE Daily Index Close for the appropriate years. From this data you will be able to determine the highest close of the utility index for each year.

Let x = 0 for the year 1974 and with a statistical package or a graphing calculator make a scatterplot with the number of years since 1974 being the independent variable and the highest utility index for x years after 1974 being the dependent variable. Using a statistical package or a graphing calculator fit a quadratic equation to this data set. Using this quadratic equation, predict the highest close of the utility index of the NYSE for next year and for the year 1966.

With a statistical package or a graphing calculator fit an equation of the form ln y = . . . . Rewrite this equation using properties of exponents so it is of the form y = . . . . Use this equation to predict the highest close of the utility index of the NYSE for nextyear and for the year 1966.

Compare your quadratic predictions with your exponential predictions. Which equation do you think gives the better prediction, the quadratic or exponential? Explain. Compare your predictions with the actual highest close of the utility index of the NYSE in 1966.

NYSE Utility Index