A price-earnings ratio or P/E ratio is calculated as a firm's share price compared to the income or profit earned by the firm per share. Generally, a high P/E ratio suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E ratio. The following table shows the P/E ratios for a sample of firms in the footwear industry:

Firm P/E Ratio Brown Shoe Co., Inc. 20.54 Collective Brands, Inc. 9.33 CROCS Inc. 22.63 DSW Inc. 14.42 Nike Inc. 18.68 Skechers USA Inc. 9.35 Timberland Co. 14.93 Source: http://biz.yahoo.com; data retrieved August 23,2010.

Let these ratios represent a random sample drawn from a normally distributed population. Derive a 90% confidence interval of the mean P/E ratio for the entire footwear industry. P-69