Are top executives of larger companies paid significantly more than those of smaller companies? Consider data on CEO pay (dollars) and market capitalization (the total market value of stock, in $ millions) for a sample of companies, as shown in Table 11.3.11.
a. How strong is the association between CEO pay and market capitalization? Please give both a number and its interpretation in words.
b. Find the regression equation to explain CEO pay using market capitalization.
c. Find and interpret the residual value for Red Lion Hotels, predicting CEO pay from market capitalization.
d. Find and interpret the 95% confidence interval for the slope coefficient.
e. Is there a significant relationship between CEO pay and market capitalization? How do you know?

  • CreatedNovember 11, 2015
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