Ch6 Curve Fitting With Polynomial Models

The first thing I need to do is go to YAHOO Finance to find the opening prices of the my stock, GAP, and the index S&P500 for the years 1994, 1995, 1996, 1997, 1999, 2000, 2001, 2002, 2003, 2004.Then I types the datas in the calculator and used STAT to find the functions, I choose quartic regression because the correlation coefficients are closest to 1. Next I usesd the graph to estimates the prices of 2002, 2005, 2006, 2008, 2010, 2011; afterward I go to YAHOO Finance to find the actual prices, but the estimations and the real prices don't match. Finally, I went online to check the news of what is happening in U.S. that affect the opening prices.

In 2002, the prices don't match, because on September 11 the terrorist bomb the buildings in U.S.The stock decrease because peaople are scare of dangers when went out to spend their money. The S&P500 prices drop a little because people are trading their stocks in fears.

GAP cut prices on the fleece and down jackets in Nov. and early Dec. in 2005 attracting more customers, therefore the stock rised (but still doesn't match the estimate price). S&P500 decreased because Hurricane Katrina destroy the cradle of jazz, New Orleans, distrubing the stock market.

In 2006, my stock decreased and my index increase because sales fell by 1.5% by the end of Jan.

2008 estimation didn't match probably because of the 2008 stock market crash. However the affects is not as big because it mostly affects the banks.

In 2010, the stock is increasing a little beacause after Barack Obama become the presidents he tried to improve the economy, so people can spend more. But the index decreased because people are still afraid of another stock market crash so they are not very active in trading and buying stocks in the stock market.

In 2010, both the stock and S&P500 increased because the progress of economy recovering is good, more jobs are created and so people are not as worry about losing and spending their money.

Many of the predictions didn't came close to the real prices is maybe the graphs are not very suit for the datas. Of course the real world events also set the prices off.