4. From the regression equation, what is the predicted current stock price (in dollars) when the earnings per share is 57.34 dollars? (Round U your answer to at least two decimal places.)
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
![10:07
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O REGR.
Predict.
A financial analyst is examining the relationship between stock prices
and earnings per share. She chooses fifteen 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 î=-0.021 + 0.039.x. This line, along with a scatter plot of her data, is shown
in Figure 1.
Earnings per
Current stock
price, y
(in dollars)
share, x
(in dollars)
30.62
0.89
15.77
0.47
40.14
1.88
51.19
1.61
25
26.79
1.06
18.54
0.74
59.71
2.26
20.78
0.75
38.96
1.16
34.97
1.44
41.67
0.98
42.69
1.43
32.30
1.81
58.49
2.74
Figure 1
29.83
1.44
Send data to Excel
Based on her data and her regression line, answer the following:
1. Fill in the blank: For these data, current stock prices that are
greater than the mean of the current stock prices tend to be paired
with values for earnings per share that are the mean of the
values for earnings per share.
greater than
2. 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?
0.039
3. From the regression equation, what is the predicted current stock
price (in dollars) when the earnings per share is 34.97 dollars? (Round 1342
your answer to at least two decimal places.)
4. From the regression equation, what is the predicted current stock
price (in dollars) when the earnings per share is 57.34 dollars? (RoundO
your answer to at least two decimal places.)
Explanation
Check
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![O REGRESSION AND CORRELATION
Shasia
Predictions from the least-squares...
4. From the regression equation, what is the predicted current stock
price (in dollars) when the earnings per share is 57.34 dollars? (Round
your answer to at least two decimal places.)
Explanation
Check
UZUZ1IMICOAW-D!! CUULAIUN, AIL KUES Reserved.
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Given:
Regression data
to find:
predicted current stock price when the earnings per share is 57.34$
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