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A financial analyst is examining the relationship between stock prices and earnings per share. She chooses sixteen publicly traded companies at random and records
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 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). A scatter plot of her data is shown in Figure 1. Also given is the product of the earnings per share and the current stock price for each of the sixteen stocks. (These products, written in the column labelled "xy", may aid in calculations.) Earnings per share, x Current stock (in dollars) price, y (in dollars) xy 20.40 0.70 14.28 26.44 1.06 28.0264 28.93 1.38 39.9234 34 52.43 2.49 130.5507 2.5. 49.90 1.83 91.317 30.81 1.73 53.3013 18.37 0.65 11.9405 40.56 1.88 76.2528 38.40 Current stock price (in dollars) 1.26 48.384 0.5 58.75 2.28 133.95 0 30.38 0.88 26.7344 13.05 0.54 7.047 43.02 1.10 47.322 Figure 1 58.35 2.99 174.4665 42.45 1.42 60.279 36.51 1.41 51.4791 Send data to calculator Earnings per share (in dollars) What is the slope of the least-squares regression line for these data? Carry your intermediate computations to at least four decimal places and round your answer to at least three decimal places. (If necessary, consult a list of formulas.)
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