A financial analyst is examining the relationship between stock prices and earnings per share. She chooses fifteen publicly traded companies at random and records for each the company's current stock price and the company's earnings per share reported for the past A financial analyst is examining the relationship months. Her data are given below, with denoting the earnings per share from the previous year, and denoting the current stock price (both in dollars). Based on these data, she computes the least-squares regression line to be . This line, along with a scatter plot of her data, is shown in Figure 1.
Earning per share, X (in dollars Current stock price Y (indollars)
56.48 2.14
43.36 1.54
26.80 0.91
42.71 1.09
17.84 0.58
32.79 1.66
36.58 1.54
14.20 0.60
49.88 1.64
36.00 0.98
57.93 2.85
22.44 0.48
29.96 1.40
41.98 1.76
29.93 1.02
Based on her data and her regression line, answer the following:



1. 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.

Choose one

greater than

less than

2. According to the regression equation, for an increase of one dollar in earnings per share, there is a corresponding increase of how many dollars in current stock price?

3. From the regression equation, what is the predicted current stock price (in dollars) when the earnings per share is 17.84 dollars? (Round your answer to at least two decimal places.)

4. From the regression equation, what is the predicted current stock price (in dollars) when the earnings per share is 23.03 dollars? (Round your answer to at least two decimal places.)