A study of the pay of corporate chief executive officers (CEOs) examined the inc

Question

A study of the pay of corporate chief executive officers (CEOs) examined the increase in cash compensation of the CEOs of 99 companies, adjusted for inflation, in a recent year. The mean increase in real compensation was x = 6.8%, and the standard deviation of the increases was s = 48%. Is this good evidence that the mean real compensation of all CEOs increased that year? Ho: = 0 (no increase) Ha: > 0 (an increase) Because the sample size is large, the sample s is close to the population , so take = 48%.

a) Calculate the P-value. (Round your answer to four decimal places.)

Explanation / Answer

Here z=6.8-0/(48/sqrt(99))=1.4096

So p value for H0: mu=0 vs H1: mu>0

p value is 0.079329

The result is not significant at p<0.05

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