Question
An article gave the following data on median worker pay (in thousands of dollars) and the 1-year percent change in stock price for the 13
An article gave the following data on median worker pay (in thousands of dollars) and the 1-year percent change in stock price for the 13 highest paying companies in the United States.
Company | Median Worker Pay | Percent Change in Stock Price |
---|---|---|
Company 1 | 134.7 | 21.8 |
Company 2 | 132.2 | 92.1 |
Company 3 | 125.0 | 33.7 |
Company 4 | 122.8 | 52.1 |
Company 5 | 122.5 | 41.8 |
Company 6 | 121.2 | 2.9 |
Company 7 | 121.2 | 5.1 |
Company 8 | 119.0 | 30.0 |
Company 9 | 118.0 | 8.1 |
Company 10 | 118.0 | 37.2 |
Company 11 | 117.6 | 15.7 |
Company 12 | 117.4 | 21.9 |
Company 13 | 115.1 | 44.9 |
(a) Construct a scatterplot for these data.
(b) Calculate the value of the correlation coefficient. (Round your answer to four decimal places.)
correlation coefficient =
Interpret the correlation coefficient.
1- There is a moderate, positive association between the percent change in stock price and median worker pay.
2- There is a weak, negative association between the percent change in stock price and median worker pay.
3- There is a moderate, negative association between the percent change in stock price and median worker pay.
4- There is no association between the percent change in stock price and median worker pay.
5- There is a weak, positive association between the percent change in stock price and median worker pay.
(c) The article states that companies that pay more are seeing a payoff in their stock performance. Is this conclusion justified based on these data? Explain.
1- The conclusion is justified based on these data because there is a negative association suggesting that in general, as median worker pay increases, so does the percent change in stock price.
2- The conclusion is not justified based on these data because there is a positive association suggesting that in general, as median worker pay increases, the percent change in stock price decreases.
3- The conclusion is not justified based on these data because there is a negative association suggesting that in general, as median worker pay increases, the percent change in stock price decreases.
4- The conclusion is not justified based on these data because there is no association between the variables.
5- The conclusion is justified based on these data because there is a positive association suggesting that in general, as median worker pay increases, so does the percent change in stock price.
(d) Is it reasonable to generalize conclusions based on these data to the population of all companies in the United States? Explain why or why not.
1- The companies represent a random sample of companies from the population of all U.S. companies. Therefore, it is reasonable to generalize the results to all companies in the U.S.
2- The strength the of the association is strong enough to allow one to generalize the results to all companies in the U.S.
3- The companies represent a random sample of companies from the population of all U.S. companies. Therefore, it is not reasonable to generalize the results to all companies in the U.S.
4- The companies do not represent a random sample of companies from the population of all U.S. companies. Therefore, it is not reasonable to generalize the results to all companies in the U.S.
5- The companies do not represent a random sample of companies from the population of all U.S. companies. Therefore, it is reasonable to generalize the results to all companies in the U.S.
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