Question
In: Math
The accompanying data represent the total compensation for 12 randomly selected chief executive officers (CEO) and the company's stock performance in a recent year.
The accompanying data represent the total compensation for 12 randomly selected chief executive officers (CEO) and the company's stock performance in a recent year. Complete parts (a) through (d) below.
(a) One would think that a higher stock return would lead to a higher compensation. Based on this, what would likely be the explanatory variable?
Stock return
Compensation
(b) Draw a scatter diagram of the data. Use the result from part (a) to determine the explanatory variable. Choose the correct graph below.
(c) Determine the linear correlation coefficient between compensation and stock return. Round to three decimal places as needed.)
(d) Does a linear relation exist between compensation and stock return? Does stock performance appear to play a role in determining the compensation of a CEO? The linear correlation coefficient is close to _______ so _______ linear relation exists between compensation and stock return. It appears that stock performance plays _______ role in determining the compensation of a CEO.
Solutions
Expert Solution
a) As stock return is deciding the compensation here, Stock return is the explanatory variable here.
b) Scatter diagram of Compensation vs stock return looks as follows. Hence, C is the correct option.
c) Linear correlation, r = CORREL(Compensation, Stock Return) = -0.021
d) The linear correlation is close to 0 so no linear relation exists between compensation and stock return.
It appears that stock performance plays no role in determining the compensation of a CEO
milcah answered 2 years agoRelated Solutions
The accompanying data represent the total compensation for 12 randomly selected chief executive officers (CEO) and...
The accompanying data represent the total compensation for
12
randomly selected chief executive officers (CEO) and the
company's stock performance in a recent year. Complete parts (a)
through (d) below.
LOADING...
Click the icon to view the CEO data.
(a) One would think that a higher stock return would lead to a
higher compensation. Based on this, what would likely be the
explanatory variable?
Stock return
Compensation
(b) Draw a scatter diagram of the data. Use the result from
part...
The accompanying data represent the total compensation for 12 randomly selected chief executive officers (CEOs) and...
The accompanying data represent the total compensation for 12
randomly selected chief executive officers (CEOs) and the
company's stock performance.
Company Compensation Return
A 14.98 74.48
B 4.61 63.62
C 6.15 148.21
D 1.11 30.35
E 1.54 11.94
F 3.28 29.09
G 11.06 0.64
H 7.77 64.16
I 8.23 50.41
J 4.47 53.19
K 21.39 21.94
L 5.23 33.68
(a) Treating compensation as the explanatory variable, x, use
technology to determine the estimates of β0 and β1.
The estimate of...
The accompanying data represent the total compensation for 12 randomly selected chief executive officers (CEOs) and...
The accompanying data represent the total compensation for 12
randomly selected chief executive officers (CEOs) and the
company's stock performance.
Company Compensation Return
A 14.98 74.48
B 4.61 63.62
C 6.15 148.21
D 1.11 30.35
E 1.54 11.94
F 3.28 29.09
G 11.06 0.64
H 7.77 64.16
I 8.23 50.41
J 4.47 53.19
K 21.39 21.94
L 5.23 33.68
(a) Treating compensation as the explanatory variable, x, use
technology to determine the estimates of β0 and β1.
The estimate of...
The accompanying data represent the total compensation for 12randomly selected chief executive officers (CEO) and the...
The accompanying data represent the total compensation for
12randomly selected chief executive officers (CEO) and the
company's stock performance in a recent year. Complete parts
(a)through (d) below.
Company
Compensation ($mil)
Stock Return (%)
Company A
14.51
75.47
Company B
4.09
63.96
Company C
7.06
142.07
Company D
1.01
32.66
Company E
1.96
10.63
Company F
3.77
30.69
Company G
12.03
0.71
Company H
7.63
69.35
Company I
8.47
58.74
Company J
4.07
55.97
Company K
20.91
24.27
Company L...
partial credit, 14.1.19-T The accompanying data represent the total compensation for 12 randomly selected chief executive...
partial credit, 14.1.19-T The accompanying data represent the
total compensation for 12 randomly selected chief executive
officers (CEOs) and the company's stock performance. Use the data
to complete parts (a) through (d). LOADING... Click the icon to
view the data table. (a) Treating compensation as the explanatory
variable, x, use technology to determine the estimates of beta 0
and beta 1. The estimate of beta 1 is nothing. (Round to three
decimal places as needed.) Enter your answer in the...
The given data represent the total compensation for 10 randomly selected CEOs and their company's stock...
The given data represent the total compensation for 10 randomly
selected CEOs and their company's stock performance in 2009.
Analysis of this data reveals a correlation coefficient of
r=-0.2000. 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 $25 million?
Compensation ($ millions) Stock Return (%)
26.81 6.16
12.66 29.92
19.14 31.49
13.11 79.34
11.99 -8.35
11.41 2.22
26.23 4.08
14.61...
The given data represent the total compensation for 10 randomly selected CEOs and their company's stock...
The given data represent the total compensation for 10 randomly
selected CEOs and their company's stock performance in 2009.
Analysis of this data reveals a correlation coefficient of
requals=negative 0.2324−0.2324.
Compensation
(millions of dollars)
Stock
Return (%)
26.8126.81
6.286.28
12.6112.61
30.3330.33
19.0219.02
31.6831.68
12.8712.87
79.2779.27
12.5212.52
negative 8.17−8.17
11.8311.83
2.272.27
25.9925.99
4.594.59
14.8214.82
10.5810.58
17.2817.28
3.653.65
14.3414.34
11.96
What would be the predicted stock return for a company whose CEO
made $15 million? What would be the predicted stock return...
We are interested in the relationship between the compensation of Chief Executive Officers (CEO) of firms...
We are interested in the relationship between the compensation
of Chief Executive Officers (CEO) of firms and the return on equity
of their respective firm, using the dataset salary.xlsx. The
variable salary shows the annual salary of a CEO in thousands of
dollars, so that y = 150 indicates a salary of $150,000. Similarly,
the variable ROE represents the average return on equity (ROE)for
the CEO’s firm for the previous three years. A ROE of 20 indicates
an average return...
We are interested in the relationship between the compensation of Chief Executive Officers (CEO) of firms...
We are interested in the relationship between the compensation
of Chief Executive Officers (CEO) of firms and the return on equity
of their respective firm, using the dataset below. The variable
salary shows the annual salary of a CEO in thousands of dollars, so
that y = 150 indicates a salary of $150,000. Similarly, the
variable ROE represents the average return on equity (ROE)for the
CEO’s firm for the previous three years. A ROE of 20 indicates an
average return...
We are interested in the relationship between the compensation of Chief Executive Officers (CEO) of firms...
We are interested in the relationship between the compensation
of Chief Executive Officers (CEO) of firms and the return on equity
of their respective firm, using the dataset below. The variable
salary shows the annual salary of a CEO in thousands of dollars, so
that y = 150 indicates a salary of $150,000. Similarly, the
variable ROE represents the average return on equity (ROE)for the
CEO’s firm for the previous three years. A ROE of 20 indicates an
average return...
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