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# Primary share earnings

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67. The following data show that trailing 52 week primary share earnings and books values as reported by 10 companies(the wall Street Journal, March 13/2000).

Company -Earnings-Book Value
Am Elec -25.21 -2.69
Columbia En -23.20 -3.01
Con Ed -25.19 -3.13
Duke Energy -20.17 -2.25
Edison Int'l -13.55 -1.79
Enron Cp. -7.44 -1.27
Peco -13.61 -3.15
Pub Sv Ent -21.86 -3.29
Southn Co. -8.77 -1.86
Unicom -23.22 -2.74

a. Develop a scatter diagram for the data with book value on the x-axis.
b. What is the sample correlation coefficient, and what dose it tell you about the relationship between the earning per share and the book value?

##### Solution Summary

67. The following data show that trailing 52 week primary share earnings and books values as reported by 10 companies(the wall Street Journal, March 13/2000).

Company -Earnings-Book Value
Am Elec -25.21 -2.69
Columbia En -23.20 -3.01
Con Ed -25.19 -3.13
Duke Energy -20.17 -2.25
Edison Int'l -13.55 -1.79
Enron Cp. -7.44 -1.27
Peco -13.61 -3.15
Pub Sv Ent -21.86 -3.29
Southn Co. -8.77 -1.86
Unicom -23.22 -2.74

a. Develop a scatter diagram for the data with book value on the x-axis.
b. What is the sample correlation coefficient, and what dose it tell you about the relationship between the earning per share and the book value?

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###### Education
• BSc , Wuhan Univ. China
• MA, Shandong Univ.
###### Recent Feedback
• "Your solution, looks excellent. I recognize things from previous chapters. I have seen the standard deviation formula you used to get 5.154. I do understand the Central Limit Theorem needs the sample size (n) to be greater than 30, we have 100. I do understand the sample mean(s) of the population will follow a normal distribution, and that CLT states the sample mean of population is the population (mean), we have 143.74. But when and WHY do we use the standard deviation formula where you got 5.154. WHEN & Why use standard deviation of the sample mean. I don't understand, why don't we simply use the "100" I understand that standard deviation is the square root of variance. I do understand that the variance is the square of the differences of each sample data value minus the mean. But somehow, why not use 100, why use standard deviation of sample mean? Please help explain."
• "excellent work"
• "Thank you so much for all of your help!!! I will be posting another assignment. Please let me know (once posted), if the credits I'm offering is enough or you ! Thanks again!"
• "Thank you"
• "Thank you very much for your valuable time and assistance!"

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