Question

# 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 Company L 6.696.69 32.2132.21

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? choose one.

o Compensation

o Stock return

​(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. r= ___

​(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?

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