Question

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) EEB Click the icon to view the data table (Rouna to one aecimai piace as neeaea.) (b) Assuming that the residuals are normally distributed, test whether a linear relation exists between compensation and stock return at the α: 0.05 level of significance. What are the null and alternative hypotheses? Data Table of Compensation and Stock Performanee Compensation Stock H1: Po-0 Com llions of dollars) Return 79.42 14.29 4.41 7.02 1.05 1.93 2.06 11.59 6.51 60.45 39.06 29.13 ○ D. Ho: Po=0 Compute the test statistic using technology 0.13 (Round to two decimal places as needed.) Compute the P-value using technology 0.75 4.04 20.03 5.08 56.12 29.79 31.11 Round to three decimal places as needed.)

Answer 1

null hypothesis: Alternate Hypothesis: 0 A. 0 for 0.05 level,two tailed test and n-2- 10 degree of freedom, critical t- Decision rule 2.2281 reject Ho if absolute value of test statistic Itl>2.228 estimated standard error of slope se(B,) 2.0666 test stat t β/se(A) 0.13 p value: 0.899

from above test statsitic t =0.13

p value =0.899