Finance Calculator
Texas Instruments 83 Plus Silver Edition


Regression

To perform a Linear Regression analysis, a second  variable needs to be added.   In this case, the yearly return on Stock J.  Leave the X variables, and creat another list for Y variables.

     Year                        Return on Stock J
       1 (Y01)                          38.6%
       2 (Y02)                         -24.7
       3 (Y03)                          12.3
       4 (Y04)                            8.2
       5 (Y05)                          40.1

Begin by pressing 2nd { enter the data above and seperate them with comma , which can be found on the fifth row second column } it should look like the following:
{38.6,-24.7,12.3,8.2,40.1} now press STO arrow (above the ON key) to store the data in caculator, and then name the data: YDATA.
By doing so, REPEAT the green key ALPHA before entering each alphabat. That is, ALPHA, Y (above the #1 key), ALPHA, D (above the X-1 key, fourth row first column), ALPHA, A (above MATH key, third row first column), ALPHA, T (above #4 key), ALPHA, A. after these press ENTER.

To perform the regression, press STAT, choose the CALC page 2: 2-Var Stats, ENTER. To input the X and Y variables we need to go to 2nd LIST. Under NAMES: choose XDATA, ENTER (you should see
2-Var Stats XDATA) Since we are using 2 variables so now we need to put a comma and then enter the YDATA from the 2nd, LIST. It should show on your screen: 2-Var Stats XDATA, YDATA
Now press ALPHA, SOLVE (above the ENTER key). Scrolling throught using the down arrow, the calculator should compute the following figures:



To perform the linear regression, we can go to STAT, CALC page, 8: LinReg (a+bx), press ENTER.
Now we input X and Y variables by press 2nd, LIST under NAMES: XDATA, following by a comma (,) and then enter YDATA. Now press ALPHA, SOLVE to get the following:

Plugging these figures into the linear equation Y = a + bX we get Y = -8.922 + 1.603X, which can be used to predict a Y variable given the X variable and an X variable given a Y variable. 
If X equals 2, plug it in the equation, Y will equal -5.716
Thus -5.716 (Y)= -8.922 + 1.603*2 (X)

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Last Updated on 1 May 2002, e-mail any comments to: robert.balik@wmich.edu