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Investment Return in 2012 (%) y = 0.794x + 11.662 120 100 80 60 40 20 3 13 18 23 28 33 38 -20 -40

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Investment Return in 2012 (%) y = 0.794x + 11.662 120 100 80 60 40 20 3 13 18 23 28 33 38 -20 -40 SUMMARY OUTPUT Regression Statistics Multiple R 0. 1955 R Square 0.0382 Adjusted R So 0.0317 Standard Erro 25.5511 Observations 150 ANOVA df SS MS F Significance F Regression 3840.3480 3840.3480 5.8824 0.0165 Residual 148 96622.9003 652.8574 Total 149 100463.2483 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 99.0% Upper 99.0% Intercept 1 1.6615 4.2003 2.7764 0.0062 3.3612 19.9618 0.7010 22.6220 CEO Compen 0.7940 0.3274 2.4254 0.0165 0. 1471 1.4409 -0.0603 1.6482Before interpreting this model, it is first essential to determine whether or not it is a true representation of the relationship that exists between CEO Compensation and Investment Return in the population. To do this, a hypothesis test of significance is required. (a) Using a 5% level of significance, determine whether or not this relationship between the CEO Compensation and Investment Return is a statistically significant, linear relationship. Ensure that you clearly state your hypothesis, show ALL steps, ALL working AND interpret your conclusion IN CONTEXT of this

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