Question

Fill in the blank: For these data, values for earnings per share that are less than the mean of the values for earnings per share tend to be paired with current stock prices that are _____ the mean of the current stock prices.

Earnings per share, x
(in dollars) Current stock price, y
(in dollars)
41.60 1.12
57.27 2.93
29.63 1.20
27.46 1.02
40.89 1.34
19.18 0.68
30.02 0.82
17.71 0.70
37.79 1.21
13.99 0.71
49.13 1.58
35.01 1.76
57.37 2.23
36.43 1.41
42.43 1.84

Answer 1

Mean of the earning per share is 35.72 and the mean of current stock price is 1.37

When we try to fit a linear regression equation line between these two data variables, we will get

$y=0.0415x-0.1117$

So, values for earnings per share that are less than the mean of the values for earnings per share tend to be paired with current stock prices that are less than the mean of the current stock prices.