I need help with A1, A2 and B Check my workeAn investment advisor is studying the relationship between a common stock's price to earnings (P/E) ratio and factors that she thinkswould influence it. She has the following data on the earnings per share (EPS) and the dividend percentage (Yield) for a sample of 20stocks.StockP/EEPSYield$2.462.691.20.791.423.034.0589-0.284.161.273.393.44.4641.7218.96-0.451.602.324.6.18.423.8634.8230.430.812.132.224.568.1.626.29.975.101010.861.441.17ces1.3525.4322.14112.932.592.072.191.043.521.562.2312131424.21-0.831530.912.291635.791.643.361718.993.071.981830.211.713.071932.880.350.352.212015.195.023.50Click here for the Excel Data Filea-1. Compute and report the correlation matrix. (Negative amounts should be indicated by a minus sign. Round your answers to 3decimal places.)PIEEPSYieldPIE1.EPSaw< Prev6 of 10Next >KationMacBook Air900FA a-2. Review the correlation coefficients for the independent variables. Do they indicate multicollinearity? (Round your answer to 3decimal places.)The correlation between the independent variables is. That isnot multicollinearityesb. Compute and report a multiple regression equation with P/E as the dependent variable. (Round your answers to 2 decimal placesand Constant Coef value to 1 decimal place.)P/E =EPS +Yield,c. Apply the stepwise procedure to remove insignificant independent variables. Report the regression equation. (Round your answersMacBook Ai

Correlation matrix is a table which gives correlation coefficient between variables. Each cell in…

Answered: a-2. Review the correlation…

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I need help with A1, A2 and B

Check my worke
An investment advisor is studying the relationship between a common stock's price to earnings (P/E) ratio and factors that she thinks
would influence it. She has the following data on the earnings per share (EPS) and the dividend percentage (Yield) for a sample of 20
stocks.
Stock
P/E
EPS
Yield
$2.46
2.69
1.
20.79
1.42
3.03
4.05
89
-0.28
4.16
1.27
3.39
3.
44.46
41.72
18.96
-0.45
1.60
2.32
4.
6.
18.42
3.86
34.82
30.43
0.81
2.13
2.22
4.56
8.
1.62
6.
29.97
5.10
10
10.86
1.44
1.17
ces
1.35
25.43
22.14
11
2.93
2.59
2.07
2.19
1.04
3.52
1.56
2.23
12
13
14
24.21
-0.83
15
30.91
2.29
16
35.79
1.64
3.36
17
18.99
3.07
1.98
18
30.21
1.71
3.07
19
32.88
0.35
0.35
2.21
20
15.19
5.02
3.50
Click here for the Excel Data File
a-1. Compute and report the correlation matrix. (Negative amounts should be indicated by a minus sign. Round your answers to 3
decimal places.)
PIE
EPS
Yield
PIE
1.
EPS
aw
< Prev
6 of 10
Next >
Kation
MacBook Air
900
FA

a-2. Review the correlation coefficients for the independent variables. Do they indicate multicollinearity? (Round your answer to 3
decimal places.)
The correlation between the independent variables is
. That is
not multicollinearity
es
b. Compute and report a multiple regression equation with P/E as the dependent variable. (Round your answers to 2 decimal places
and Constant Coef value to 1 decimal place.)
P/E =
EPS +
Yield,
c. Apply the stepwise procedure to remove insignificant independent variables. Report the regression equation. (Round your answers
MacBook Ai

Expert Solution

Step 1

Correlation matrix is a table which gives correlation coefficient between variables.
Each cell in the table gives correlation between two variables.

Adding data in R

PE=c(20.79,3.03,44.46,41.72,18.96,18.42,34.82,30.43,29.97,10.86,1.35,25.43,22.14,24.21,30.91,35.79,18.99,30.21,32.88,15.19)
EPS=c(2.46,2.69,-0.28,-0.45,1.60,2.32,0.81,2.13,2.22,1.44,2.93,2.07,2.19,-0.83,2.29,1.64,3.07,1.71,0.35,5.02)
Y=c(1.42,4.05,4.16,1.27,3.39,3.86,4.56,1.62,5.10,1.17,2.59,1.04,3.52,1.56,2.23,3.36,1.98,3.07,2.21,3.50) # Yield

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