The given data represent the total compensation for 10 randomly selected CEOs and their company's stock performance in 2009.  Analysis  of this datat reveals correlation coefficient of r= -0.2226.What would be the predicted stock return for a company whose CEO made $15 million? What would be the predicted stock return for a company whose CEO made $25 million? CEO compensation and stock performance:Compensation(millions dollars)/stock return( Comp) 26.08-----------6.31( stock return)12.63--------30.1819.02-----31.8813.19------80.2512.55-------(-8.81)11.81------2.9426.67-----4.9114.74----11.1917.63-----3.9314.69---12.04

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Asked Jan 22, 2020
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 The given data represent the total compensation for 10 randomly selected CEOs and their company's stock performance in 2009.  Analysis  of this datat reveals correlation coefficient of r= -0.2226.

What would be the predicted stock return for a company whose CEO made $15 million? What would be the predicted stock return for a company whose CEO made $25 million?

 

CEO compensation and stock performance:

Compensation(millions dollars)/stock return

( Comp) 26.08-----------6.31( stock return)

12.63--------30.18

19.02-----31.88

13.19------80.25

12.55-------(-8.81)

11.81------2.94

26.67-----4.91

14.74----11.19

17.63-----3.93

14.69---12.04

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Expert Answer

Step 1

The regression equation is obtained by using EXCEL. The software procedure is given below:

  • In Excel sheet, enter the data of Compensation and Stock return in different columns.
  • In Data, Select Data Analysis and Choose Regression.
  • In Input Y Range, enter Stock return.
  • In Input X Range, enter Compensation.
  • Click Labels in First Row.
  • Click Ok.
Step 2

Output using EXCEL is as follows:

Statistics homework question answer, step 2, image 1
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Step 3

From the output, it can be observed that the...

Statistics homework question answer, step 3, image 1
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