The performance of a chief executive officer (CEO) is often measured

Question

https://gmatclub.com/forum/download/file.php?mode=view&id=64012 The performance of a chief executive officer (CEO) is often measured by the return on equity for the CEO's firm. The graph is a scatter plot with 50 points, each representing the return on equity, measured in percent, that each of the 50 CEOs achieved and the corresponding salary, measured in thousands of dollars, that each CEO received. The solid line is the regression line. Select the best answer to fill in the blanks in each of the statements based on the data shown in the graph. 1. The relationship between the return on equity and CEO salary is GRAPH_1_PLACEHOLDER . 2. The number of CEOs who earned less than $500,000 is closest to GRAPH_2_PLACEHOLDER % of 50. 1.jpg

Sajjad1994 · Accepted Answer

Official Explanation

The answer to the first question is C. Based on the scatterplot, there appears to be a positive linear relationship between percent return on equity and CEO salary.

The answer to the second question is B. The graph shows that two CEOs earned less than $50,000. This represents 4% out of 50, as  \frac{2}{50} =0.04 . The number 2 is closest to of 5% or 50.

Answer: C and B

ktzsikka · Answer

1. The relationship between the return on equity and CEO salary is equal to slope of the regression line which is positive. 
Hence,  option C.

2. The number of CEOs who earned less than $500,000 is 2 which closest to 5% of 50.
Hence,  option B.

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akash2703 · Answer

1. The relationship between the return on equity and CEO salary is __________.
 
 IMO A

Looking at some of the data points of the equity returns, we can say that at 1000$ salary we have 40% return than at the salaries around 1500's with near 15% return, hence there is no relationship.

2. The number of CEOs who earned less than $500,000 is closest to __________% of 50.

IMO B

There are 2 data points below 500K making the % as x/100*50=2
x =200/50 =4% (Approx 5%)

Catman · Answer

1. Relationship between the return on equity and CEO salary can not be determined as there is both an increase and decrease in salary with increase in percent return on equity.

2. The number of CEOs who earned less than $500,000 is 2 which is close to 5% of 50.

sunitapandey · Answer

1. The relationship between the return on equity and CEO salary is ____Positive______.

A. no relationship
B. negative
C. positive

2. The number of CEOs who earned less than $500,000 is closest to _____10_____% of 50.

A. 0
B. 5
C. 10

Sajjad1994 · Answer

OA of this question is C and B.

ktzsikka  got it right.

sunitapandey  where is the explanation?

BLTN · Answer

Dear akash2703 the point you have alluded, with 1500's with near 15% return, called outlier. In terms of statistics, do not take it into consideration. Stick to main trend: Increase + Increase or Decrease + Decrease = Positive Correlation. hope it helps

Sammygal · Answer

Can some please care to elaborate how you see a positive relationship for 1.unable to understand with the explanations provided

sspiral2556 · Answer

Doesn't the prompt say "each of the 40 CEOs achieved" yet the question prompts says out of 50?

cheshire · Answer

Thank you, fixed.

The performance of a chief executive officer (CEO) is often measured

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