Statement of a problem № m40515


A USA Today editorial (Alejandro Gonzalez, “CEO Dough”) addressed the growth of compensation for corporate CEOs. Part of the story quoted a study done for BusinessWeek , which indicated that the pay packages have increased almost sevenfold on average during a current 10-year period. The file titled CEODough contains the salaries of CEOs for this 10-year difference, adjusted for inflation. Assume the populations are normally distributed. a. Determine if there is a difference in the standard deviations of the salaries of CEOs for the two years. Use a significance level of 0.02. b. Calculate the proportion of CEO salaries for the later period that are larger than the average salaries for CEOs 10 years earlier. Assume the sample statistics are sufficiently good approximations to the populations’ parameters.

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