A Financier Whose Specialty Is Investing in Movie Productions Has

question 88

Essay

A financier whose specialty is investing in movie productions has observed that, in general, movies with 'big-name' stars seem to generate more revenue than those movies whose stars are less well known. To examine his belief, he records the gross revenue and the payment (in $ million) given to the two highest-paid performers in the movie for 10 recently released movies. $$\begin{array} { | c | c | c | } \hline \text { Movie } & \begin{array} { c } \text { Cost of two highest- } \\\text { paid performers } ( \$ \mathrm {~m} )\end{array} & \begin{array} { c } \text { Gross revenue } \\( \$ \mathrm {~m} )\end{array} \\\hline 1 & 5.3 & 48 \\\hline 2 & 7.2 & 65 \\\hline 3 & 1.3 & 18 \\\hline 4 & 1.8 & 20 \\\hline 5 & 3.5 & 31 \\\hline 6 & 2.6 & 26 \\\hline 7 & 8.0 & 73 \\\hline 8 & 2.4 & 23 \\\hline 9 & 4.5 & 39 \\\hline 10 & 6.7 & 58 \\\hline\end{array}$$ Conduct a test of the population slope to determine at the 5% significance level whether a linear relationship exists between payment to the two highest-paid performers and gross revenue.

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Definitions:

Mesmerism

An early form of psychotherapy involving the practice of hypnotism, originally proposed by Franz Mesmer in the 18th century, based on the belief in animal magnetism.

Trancelike State

A state of consciousness resembling trance, often induced by hypnosis, meditation, or other means, where a person may have heightened suggestibility and focus.

Hypnosis

A trance-like state of focused attention and heightened suggestibility, with diminished peripheral awareness, often used for therapeutic purposes.

Temporal Disintegration

A psychological condition where an individual loses the capacity to integrate events coherently in regard to time.