Executive compensation has risen dramatically compared to the rising levels of a

Question

Executive compensation has risen dramatically compared to the rising levels of an average workers wage over the years. Sarah is an MBA student who decides to use her statistical skills to estimate the mean CEO compensation in 2010 for all large companies in the United States. She takes a random sample of six CEO compensations. Use Table 2. a. Help Sarah use the above information to construct the 90% confidence interval for the mean CEO compensation of all large companies in the United States? (Round intermediate calculations to 4 decimal places. Round "sample mean" and "sample standard deviation" to 2 decimal places and "t" value to 3 decimal places and final answers to 2 decimal places.)

Explanation / Answer

The statistical software output for this problem is:

One sample T confidence interval:
: Mean of variable

90% confidence interval results:

Hence,

Confidence interval: $ 3.64 to $ 7.05 milliions

Variable Sample Mean Std. Err. DF L. Limit U. Limit Compensations (Mn $) 5.345 0.84668668 5 3.6388854 7.0511146

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