Are America's top chief executive officers (CEOS) really worth all that money? One way to answer this question is to look at row B, the annual company percentage increase in revenue, versus row A, the CEO's annual percentage salary increase in that same company. Suppose that a random sample of companies yielded the following data: B: Percent increase 12 14 16 24 15 10 10 9 for company A: Percent increase 2 10 15 20 10 14 3 0 for CEO

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Are America's top chief executive officers (CEOS) really
worth all that money? One way to answer this question is
to look at row B, the annual company percentage increase
in revenue, versus row A, the CEO's annual percentage
salary increase in that same company. Suppose that a
random sample of companies yielded the following data:
B: Percent increase
12
14 16 24 15 10 10 9
for company
A: Percent increase
10 15 20 10 14 3 0
for CEO
Transcribed Image Text:Are America's top chief executive officers (CEOS) really worth all that money? One way to answer this question is to look at row B, the annual company percentage increase in revenue, versus row A, the CEO's annual percentage salary increase in that same company. Suppose that a random sample of companies yielded the following data: B: Percent increase 12 14 16 24 15 10 10 9 for company A: Percent increase 10 15 20 10 14 3 0 for CEO
Do these data indicate that the population mean
percentage increase in corporate revenue (row B) is
different from the population mean percentage increase
in CEO salary? Assume that the distribution of differences
is approximately normal, mound-shaped and symmetric.
Use a 1% level of significance. Use paired t tests
a. State the Null and Alternate Hypothesis.
b. Compute the numerical value of the test statistics.
c. Find the p-value corresponding the test statistics.
d. Is the test statistically significant? Will you reject or
fail to reject the null hypothesis?
Transcribed Image Text:Do these data indicate that the population mean percentage increase in corporate revenue (row B) is different from the population mean percentage increase in CEO salary? Assume that the distribution of differences is approximately normal, mound-shaped and symmetric. Use a 1% level of significance. Use paired t tests a. State the Null and Alternate Hypothesis. b. Compute the numerical value of the test statistics. c. Find the p-value corresponding the test statistics. d. Is the test statistically significant? Will you reject or fail to reject the null hypothesis?
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