Question

Question: The accompanying data represent the total compensation for 12 randomly selected chief executive officers​ (CEO)...

Question:

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.

Company          Compensation ($mil)    Stock Return (%)

Company A                    14.58                               75.45

Company B                    4.07                                63.99

Company C                    7.08                                142.06

Company D                    1.07                                32.69

Company E                     1.98                                10.68

Company F                     3.79                                30.69

Company G                    12.07                              0.72

Company H                    7.56                                69.43

Company I                      8.47                                 58.75

Company J                     4.05                                55.95

Company K                     20.85                             24.33

Company L                     6.66                                32.25

​(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?Compensation or Stock return

​(b) Draw a scatter diagram of the data. Use the result from part​ (a) to determine the explanatory variable.

​(c) Determine the linear correlation coefficient between compensation and stock return.

r =         

​(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 1, -1, OR 0, so NO, A POSTIVE OR A NEGATIVE linear relation exists between compensation and stock return. It appears that stock performance plays NO, A POSTIVE OR A NEGATIVE role in determining the compensation of a CEO.

Homework Answers

Answer #1

a) Stock performance is the explanatory variable here

b)

Points are scattered and no specific relation is found between the variables

c)

d) The correlation coefficient is -0.03 which is almost near to zero. There exist no linear relationship between variables as the correlation coeffiicient is almost near to 0. So it appears that stock performance plays no role in determining the compensation of CEO

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The accompanying data represent the total compensation for 12 randomly selected chief executives officers(CEO) and the...
The accompanying data represent the total compensation for 12 randomly selected chief executives officers(CEO) and the company's stock performance in a recent year Company Compensation($mil)Stock Return(%) Company A 14.56 75.49 Company B 4.09 63.96 Company C 7.07 142.03 Company D 1.04 32.66 Company E 1.91 10.63 Company F 3.76 30.69 Company G 12.03 0.78 Company H 7.63 69.43 Company I 8.47 58.66 Company J 4.06 55.91 Company k 20.92 24.31 Company L 6.67 32.25 (a). One would think that a...
The accompanying data represent the total compensation for 12 randomly selected chief executive officers​ (CEO) and...
The accompanying data represent the total compensation for 12 randomly selected chief executive officers​ (CEO) and the​ company's stock performance in a recent year. Company   Compensation ($mil)   Stock Return (%) Company A   14.54   75.47 Company B   4.09   64.03 Company C   7.08   142.05 Company D   1.09   32.73 Company E   1.93   10.65 Company F   3.77   30.63 Company G   12.01   0.77 Company H   7.63   69.37 Company I   8.42   58.72 Company J   4.08   55.97 Company K   20.93   24.26 Company L   6.67   32.19 ​(a) One...
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. Company Compensation​ ($mil) Stock Return​ (%) Company A 14.5514.55 75.4475.44 Company B 4.094.09 64.0464.04 Company C 7.127.12 142.09142.09 Company D 1.051.05 32.6932.69 Company E 1.971.97 10.6610.66 Company F 3.723.72 30.6130.61 Company G 12.0112.01 0.720.72 Company H 7.567.56 69.4569.45 Company I 8.438.43 58.7558.75 Company J 4.044.04 55.9855.98 Company K 20.9220.92 24.2924.29...
The accompanying data represent the total compensation for 12 randomly selected chief executive officers​ (CEO) and...
The accompanying data represent the total compensation for 12 randomly selected chief executive officers​ (CEO) and the​ company's stock performance in a recent year. Company   Compensation ($mil)   Stock Return (%) Company A   14.52   75.46 Company B   4.07   64.01 Company C   7.15   142.09 Company D   1.07   32.67 Company E   1.93   10.67 Company F   3.79   30.69 Company G   12.01   0.75 Company H   7.58   69.39 Company I   8.44   58.65 Company J   4.06   55.91 Company K   20.89   24.29 Company L   6.61   32.23 ​(c) Determine...
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. 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 answer box and...
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. Use the data to complete parts (a) through (d). 3 Click the icon to view the data table. Data Table of Compensation and Stock Performance Company    Compensation (millions of dollars)   StockReturn (%) A                                     13.82                                       71.39 B                                        3.83                                     69.37 C                                        6.16                                     141.42 D                                        1.95                                      37.61 E                                         1.13                                      10.34 F                                         3.71                                     29.55 G                                       11.96                                      0.77 H                                       6.22                                      62.48 I                                         9.31                                       53.21 J                                       ...
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. Use the data to complete parts​ (a) through​ (d). ​Company   Compensation   Return A    15.68 79.64 B 4.57 69.24 C 7.75 146.24 D 1.35 38.22 E   1.33 11.43 F 2.53 29.56 G 12.81 0.53 H 6.71 69.57 I 8.01 55.37 J 3.24 52.04 K 21.37 25.73 L 6.82 30.89 treating compensation as the explanatory​ variable, x, use technology to determine...
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   14.62   74.84 B   3.29   60.79 C   6.65   141.68 D   1.92   33.03 E   1.78   11.89 F   2.88   30.99 G   11.37   0.92 H   6.81   64.52 I   8.91   52.12 J   3.17   52.88 K   20.67   23.68 L   6.43   31.83 ​(a) Treating compensation as the explanatory​ variable, x, use technology to determine the estimates of β0 and β1. The estimate of...
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 0.2135−0.2135. 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? Click the icon to view the compensation and stock performance data. Click the icon to view a table of critical...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT