In a study to determine if you can predict stock price based on P-E ratio, what is the response variable and what is the explanatory variable? How would you label the X and Y axes in a scatterplot of the data?
In this study, the response variable is the stock price, and the explanatory variable is the P-E ratio.
To create a scatterplot of the data, you would label the x-axis with the P-E ratio, as it is the explanatory variable. The y-axis would be labeled with the stock price, as it is the response variable.