A Financial Analyst Is Examining The Relationship Between Stock Prices And Earnings Per Share She Chooses Sixteen Publi 1 (30.28 KiB) Viewed 144 times
A Financial Analyst Is Examining The Relationship Between Stock Prices And Earnings Per Share She Chooses Sixteen Publi 2 (19.66 KiB) Viewed 144 times
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 mornings 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 ġ=-0.227+0.045x. This tine, along with a scatter plot of her data, is shown below. Current stock price, (in dollars) 157 0.91 Earnings per share, in dollars) 32.89 27.57 37:23 52.18 28.33 58.47 5787 42.12 2164 4823 17.40 29 4235 3473 15:48 41.78 275 0.82 2.10 2.79 18 0.72 16 0.776 current stock price in dollars 1.30 1:57 15 0.51 Eamings per share in dollars) 10
Based on the analyst's data and regression line, answer the following (a) What was the observed current stock price in dollars) when the earnings per share was 42.12 dollars? (b) From the regression equation, what is the predicted current stock price (in dollars) when the earnings per share is 42.12 dollars? Round your answer to two or more decimal places.
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