Question

-) to determine the exp Company mi Return (%) 25 Compensation o Company A Company B Company C Company D Company E Company F Company G Company H Company 1 Company J Company K Company L Compensation Stock ($mil) 14.54 75.48 4.14 63.99 7.07 142.02 1.08 32.73 1.98 10.69 3.71 30.69 12.02 0.72 7.62 69.44 8.42 58.68 4.03 55.94 20.86 24.26 6.69 32.16 Sto 25 cion and stock return. Print Done -turn? Does stock per CEO? linear relation exists between compensation and stock return. It appears that stock performance play

Answer 1

Solution:

a) stock return is right answer

b) Option C is right answer

Y Values X Values

The coefficient of correlation is r=-0.0289

X Values { = 92.16 Mean = 7.68 E(X - Mx)2 = SSx = 359.176 Y Values = 596.8 Mean = 49.733 ECY - My)2 = SSy = 15426.054 X and Y Combined N = 12 X(X - MAY - My) = -68.045 R Calculation r = ((X - My)(Y - Mx))/ \((SSx)(SSy)) r = -68.045 / v((359.176)(15426.054)) = -0.0289 Meta Numerics (cross-check) r= -0.0289

d) the linear correlation coefficient is close to 0, so there is no linear relation exist between compensation and stock return. It appears that stock performance play no role in determine the compensation of CEO