The accompanying data represent the annual rates of return of two companies’ stock for the past 12 years. Complete parts (a) through (i).
(a) Draw a scatter diagram of the data treating the rate of return of Company 1 as the explanatory variable. Choose the correct graph below.
(b) Determine the correlation coefficient between rate of return of Company 1 and Company 2.
(c) Based on the scatter diagram and correlation coefficient, is there a linear relation between rate of return of Company 1 and Company 2?
O No
O Yes
(d) Find the least-squares regression line treating the rate of return of Company 1 as the explanatory variable. Choose the correct answer below.
(e) Predict the rate of return of Company 2 if the rate of return of Company 1 is 0.2 (20%).
The rate of return of Company 2 will be
Data Table
