Question

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 for company	21	10	15	23	15	29	20	30
A: Percent increase for CEO	17	1	11	28	16	34	12	22

​

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 5% level of significance. What is the alternate hypothesis?

​

Select one:

a. H₁ : μ_d = 0

b. H₁ : μ_d ≥ 0

c. H₁ : μ_d < 0

d. H₁ : μ_d > 0

e. H₁ : μ_d ≠ 0

Answer 1

Obs.	B	A	d=B-A	d-d_bar	(d-d_bar)^2
1	21	17	4	1.25	1.5625
2	10	1	9	6.25	39.0625
3	15	11	4	1.25	1.5625
4	23	28	-5	-7.75	60.0625
5	15	16	-1	-3.75	14.0625
6	29	34	-5	-7.75	60.0625
7	20	12	8	5.25	27.5625
8	30	22	8	5.25	27.5625
SUM =			22		231.5
MEAN =			2.75