A new manager is hired for an office; they immediately begin to build a rapport with colleagues and subordinates, tactfully navi
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Answer with Explanation:
For simplicity, we denote the compensations with variable <em>x </em>and the stock return with variable <em>y.</em> Let us first find the mean and standard deviation for both compensation (x) and return (y).
Mean of Compensation (<em>x) </em> will be,
Mean of Stock Return (y) will be,
Standard Deviation for Compensation (x) is given by,
Standard Deviation for Compensation (x) is given by,
To find the predicted stock return, we have to use the equation for of line of regression,
where,
Equation (1) will become,
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