Question

Using techniques from an earlier section, we can find a confidence interval for μ_d. Consider a random sample of n matched data pairs A, B. Let d = B − A be a random variable representing the difference between the values in a matched data pair. Compute the sample mean

d

of the differences and the sample standard deviation s_d. If d has a normal distribution or is mound-shaped, or if n ≥ 30, then a confidence interval for μ_d is as follows.

d − E < μ_d < d + E

where E = t_c

s_d

n

c = confidence level (0 < c < 1)

t_c = critical value for confidence level c and d.f. = n − 1

B: Percent increase for company	16	6	14	18	6	4	21	37
A: Percent increase for CEO	25	14	23	14	−4	19	15	30

(a) Using the data above, find a 95% confidence interval for the mean difference between percentage increase in company revenue and percentage increase in CEO salary. (Round your answers to two decimal places.)

lower limit
upper limit

Answer 1

a)

for 95% CI; and 7 degree of freedom, value of t=			2.365
therefore confidence interval=sample mean -/+ t*std error
margin of errror          =t*std error=		7.917
lower confidence limit                     =		-9.67
upper confidence limit                    =		6.17