The file CEO Compensation2013 includes the total compensation (in $ millions) for CEOs of 200 Standard & Poor’s 500 companies and the investment return in 2013. (Data extracted from “ Millions by millions, CEO pay goes up,” usat. ly/ 1jhbypL.)
a. Compute the correlation coefficient between compensation and the investment return in 2013.
b. At the 0.05 level of significance, is the correlation between compensation and the investment return in 2013 statistically significant?
c. Write a short summary of your findings in (a) and (b). Do the results surprise you?