Thursday, May 5, 2011

Ch 6 Project

For this project, I found the the opening values for my stock Urban Outfitters Inc. and it's index, NASDAQ for January 5 of the years 1994, 1995, 1996, 1997, 2000, 2001, 2003 & 2004. Next, I used my graphing calculator to insert the prices to find the best correlation coefficient that was closest to one. I tried a cubic and quartic model. The quartic regression was the best for my polynomial model. With that polynomial model, I inserted the years 2002, 2005, 2008, 2010 & 2011 to predict the prices for those years. I found the opening values for the index NASDAQ and repeated the last step. My predictions didn't match the actual opening prices, but some were close. I used the internet to research information of my stock to find out the causes of the changes in my stock and index.

2002- Since the 9/11 attack, a lot of devastated families had to rebuild a lot of their finances back up so they didn't have enough money to spend on clothes. There was a decrease in NASDAQ because a lot of stock holders were frightened to put money in after the 9/11 disaster.

2005- In 2005, tax increased to 8.25% which made the price for clothing more expensive. NASDAQ increased due to a higher tax rate which increased both stock and index.

2008- In 2008, the value decreased because there was at least 20,000 layoffs that year. NASDAQ index increased due to the many other trading companies it is connected with.

2010-2011- The predictions for both are off because a lot of events could of happened to affect how much each index and stock would increase.

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