Tim Cooper plans to invest money in a mutual fund that is tied to one of the major market indices, either the S&P 500 or the Dow Jones Industrial Average. To obtain even more diversification, Tim has thought about investing in both of these. To determine whether investing in two funds would help, Tim decided to take 20 weeks of data and compare the two markets. The closing price for each index is shown in the table below:

Develop a regression model that would predict the DJIA based on the S&P 500 index. Based on this model, what would you expect the DJIA to be when the S&P is 1,100? What is the correlation coefficient (r) between the twomarkets?

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WEEK 1 23 4 567 DJIA 10,226 10,473 10.452 10,442 10,471 10,213 10,187 S&P 1,107 14 ,135 ,139 1,142 1,108 1,110 WEEK 89 10 12 13 14 DJIA 10,240 10,596 10,584 10,619 10,628 10,593 10,488 S&P 1.21 157 1,145 1,144 1,146 1143 1131 WEEK 15 16 17 18 19 20 DJIA 10,568 10,60 10,459 10,410 10,325 10,278 S&P 1,142 1,140 ,122 1,108 1096 1,089