A financial analyst is examining the relationship between stock prices and earnings per share. She chooses sixteen publicly traded companies at random and records for each the company's current stock price and the company's earnings per share reported for the past 12 months. Her data are given below, with X denoting the earnings per share from the previous year, and y denoting the current stock price (both in dollars). Based on these data, she computes the least- squares regression line to be ŷ=-0.231+0.045x. This line, along with a scatter plot of her data, is shown below. Earnings per share, x Current stock price, y (in dollars) (in dollars) 58.47 2.17 30.64 1.44 41.03 1.45 41.26 1.05 26.04 0.80 42.80 1.84 18.10 0.77 21.73 0.62 29.68 0.74 32.97 1.64 37.74 1.56 57.98 2.70 38.05 1.16 49.40 1.59 15.49 0.59 51.67 2.65 Send data to calculator ✓ Send data to Excel Current stock price (in dollars) Based on the analyst's data and regression line, complete the following. 05 0 10 30 x x x ** 40 Earnings per share (in dollars) × × 50 60 (a) For these data, current stock prices that are less than the mean of the current stock prices tend to be paired with values for earnings per share that are (Choose one) the mean of the values for earnings per share. (b) According to the regression equation, for an increase of one dollar in earnings per share, there is a corresponding increase of how many dollars in current stock price? ☐
A financial analyst is examining the relationship between stock prices and earnings per share. She chooses sixteen publicly traded companies at random and records for each the company's current stock price and the company's earnings per share reported for the past 12 months. Her data are given below, with X denoting the earnings per share from the previous year, and y denoting the current stock price (both in dollars). Based on these data, she computes the least- squares regression line to be ŷ=-0.231+0.045x. This line, along with a scatter plot of her data, is shown below. Earnings per share, x Current stock price, y (in dollars) (in dollars) 58.47 2.17 30.64 1.44 41.03 1.45 41.26 1.05 26.04 0.80 42.80 1.84 18.10 0.77 21.73 0.62 29.68 0.74 32.97 1.64 37.74 1.56 57.98 2.70 38.05 1.16 49.40 1.59 15.49 0.59 51.67 2.65 Send data to calculator ✓ Send data to Excel Current stock price (in dollars) Based on the analyst's data and regression line, complete the following. 05 0 10 30 x x x ** 40 Earnings per share (in dollars) × × 50 60 (a) For these data, current stock prices that are less than the mean of the current stock prices tend to be paired with values for earnings per share that are (Choose one) the mean of the values for earnings per share. (b) According to the regression equation, for an increase of one dollar in earnings per share, there is a corresponding increase of how many dollars in current stock price? ☐
Calculus For The Life Sciences
2nd Edition
ISBN:9780321964038
Author:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Chapter1: Functions
Section1.CR: Chapter 1 Review
Problem 86CR
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Transcribed Image Text:A financial analyst is examining the relationship between stock prices and earnings per share. She chooses sixteen publicly traded companies at random and
records for each the company's current stock price and the company's earnings per share reported for the past 12 months. Her data are given below, with X
denoting the earnings per share from the previous year, and y denoting the current stock price (both in dollars). Based on these data, she computes the least-
squares regression line to be ŷ=-0.231+0.045x. This line, along with a scatter plot of her data, is shown below.
Earnings per share, x
Current stock price, y
(in dollars)
(in dollars)
58.47
2.17
30.64
1.44
41.03
1.45
41.26
1.05
26.04
0.80
42.80
1.84
18.10
0.77
21.73
0.62
29.68
0.74
32.97
1.64
37.74
1.56
57.98
2.70
38.05
1.16
49.40
1.59
15.49
0.59
51.67
2.65
Send data to calculator ✓
Send data to Excel
Current stock price
(in dollars)
Based on the analyst's data and regression line, complete the following.
05
0
10
30
x
x
x
**
40
Earnings per share
(in dollars)
× ×
50
60
(a) For these data, current stock prices that are less than the mean of the current stock prices tend to be paired with
values for earnings per share that are (Choose one) the mean of the values for earnings per share.
(b) According to the regression equation, for an increase of one dollar in earnings per share, there is a corresponding
increase of how many dollars in current stock price?
☐
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