A recent study by a major financial investment company was interested in determining whether the annual percentage change in stock price for companies is linearly related to the annual percent change in profits for the company. Please note that this and the next problem use this same data for the same case. The following data was determined for 7 randomly selected companies: % Change Stock Price 8.4 % Change in Profit 4.2 9.5 13.6 -3.2 5.6 11.2 4.5 12.2 18.4 12 -2.1 -13.4 Based upon this sample information, what portion of variation in stock price percentage change is explained by the percent change in yearly profit? A) About 49 percent C) Approximately 70 percent B) Nearly 19 percent D) None of the above

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A recent study by a major financial investment company was interested in determining whether the annual
percentage change in stock price for companies is linearly related to the annual percent change in profits for the
company. Please note that this and the next problem use this same data for the same case. The following
data was determined for 7 randomly selected companies:
% Change Stock Price
% Change in Profit
8.4
4.2
9.5
5.6
13.6
11.2
-3.2
4.5
12.2
18.4
12
-2.1
-13.4
Based upon this sample information, what portion of variation in stock price percentage change is explained by
the percent change in yearly profit?
A) About 49 percent
C) Approximately 70 percent
B) Nearly 19 percent
D) None of the above
Transcribed Image Text:A recent study by a major financial investment company was interested in determining whether the annual percentage change in stock price for companies is linearly related to the annual percent change in profits for the company. Please note that this and the next problem use this same data for the same case. The following data was determined for 7 randomly selected companies: % Change Stock Price % Change in Profit 8.4 4.2 9.5 5.6 13.6 11.2 -3.2 4.5 12.2 18.4 12 -2.1 -13.4 Based upon this sample information, what portion of variation in stock price percentage change is explained by the percent change in yearly profit? A) About 49 percent C) Approximately 70 percent B) Nearly 19 percent D) None of the above
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