The following data represent the total compensation for 12 randomly selected chief executive officers (CEOs) and the company's stock performance in 2013.

(a) Treating compensation as the explanatory variable, x, determine the estimates of ß0 and ß1.
(b) Assuming the residuals are normally distributed, test whether a linear relation exists between compensation and stock return at the α = 0.05 level of significance.
(c) Assuming the residuals are normally distributed, construct a 95% confidence interval for the slope of the true leastsquares regression line.
(d) Based on your results to parts (b) and (c), would you recommend using the least-squares regression line to predict the stock return of a company based on the CEO's compensation? Why? What would be a good estimate of the stock return based on the data in the table?

Company Compensation (millions of dollars) Stock Return (%) Navistar International 14.53 75.43 Aviv REIT 4.09 64.01 142.07 Groupon 7.11 Inland Real Estate 1.05 32.72 Equity Lifestyles Properties 1.97 10.64 Tootsie Roll Industries 3.76 30.66 0.77 Catamaran 12.06 Packaging Corp of America Brunswick 7.62 69.39 58.69 8.47 LKQ 4.04 55.93 Abbott Laboratories 20.87 24.28 TreeHouse Foods 6.63 32.21 Data from Chicago Tribune, June 1, 2014