Listed below is the selling price for a share of Oracle Inc. stock at the close of the year for 1990 through 2012.
a. Plot the data.
b. Determine the least squares trend equation. Use both the actual stock price and the logarithm of the price. Which seems to yield a more accurate forecast?
c. Using the equation with the logarithm of price, calculate the points for the years 1993 and 1998.
d. Using the equation with the logarithm of price, estimate the selling price in 2015. Does this seem like a reasonable estimate based on the historical data?
e. Using the equation with the logarithm of price, how much has the stock price increased or decreased (per year) on average during the period?
Solution:
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