The data below gives the closing price of Harley-Davidson stock at the end of ea
ID: 3370797 • Letter: T
Question
The data below gives the closing price of Harley-Davidson stock at the end of each year from 1994 through 2001.
Year - 1994 1995 1996 1997 1998 1999 2000 2001
Stock - $6.80 $7.03 $11.56 $13.48 $23.54 $31.93 $39.73 $54.31
a. What is the response variable?
b. What is the explanatory variable?
c. Is it reasonable for the two variables to have a cause-and-effect relationship? Explain.
Explanation / Answer
a) Response variable: Stock
The variable whose value is to be predicted is called response variable
Explanatory variable: Year
The variable whose value is to be used for prediction is called explanatory variable
c) It is not cause-and-effect relationship
Cause-and-effect relationship means a relationship in which one event (the cause) makes another event happen (the effect).
But here the data is belonging to time series model