We are asked to find a scatter plot that consists of at least seven data points. Then we are going draw the line of best fit, and find its equation. Let's do it! Here is a plot showing the change in the price of Company X's stock in the beginning of June 2022.
Here, the stock price is represented on the y-axis and the day number of such price is represented on the x-axis. By hand, let's draw a line of best fit for the data points. Recall that this line needs to be close to most of the data.
With that done, we are ready to write the equation of the line in a slope-intercept form.
y=mx+b
For that, we will need two points on the line. These may or not may be the data points. In our case, let's pick the two points and then highlight them.
Let's now recall the Slope Formula.
m = y_2-y_1/x_2-x_1
If we substitute the coordinates of the two points into this formula, we will get the slope of our line m. Let's do it then!
The slope of the line is - 4. This means that the price of the stock dropped by four dollars each day. Now we want to find the y-intercept b. We need to look for a point where the line crosses the y-axis.
The y-intercept is 46 because the line crosses the y-axis at point (0,46). We can now substitute the found values into the line equation.
y=mx+b
⇓
y = - 4x+ 46
This is the equation for the line of best fit. Note that this is just an example solution.
