Question: The file CEO 2016 includes the total compensation (in $millions) for CEOs of 200 Standard & Poors 500 companies and the investment return in 2016.

The file CEO 2016 includes the total compensation (in $millions) for CEOs of 200 Standard & Poor’s 500 companies and the investment return in 2016.

Source: Data extracted from R. Lightner and T. Francis, “How Much Do Top CEOs Make?” available at bit.ly/1QqpEUZ.)

a. Compute the correlation coefficient between compensation and the investment return in 2016.

b. At the 0.05 level of significance, is the correlation between compensation and the investment return in 2016 statistically significant?

c. Write a short summary of your findings in (a) and (b). Do the results surprise you?

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