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5-7. Suppose that in the population the annual salary (Salary) of a CEO i measured in million dollars is related to the annual sales of
5-7. Suppose that in the population the annual salary (Salary) of a CEO i measured in million dollars is related to the annual sales of the company (Sales) measured in million dollars according to the following regression model: Salary, = 5+.1Sales, + 8, where the &, are iid, independent of Sales, and &, ~ N(0,9) and Sales, ~ N(50,10). 5. What is the standard deviation CEO salaries in million dollars for CEOs of firms with annual sales of five million dollars? (a) 9 (b) 10 (c) 19 (d) 13.45 6. What is the expected difference in million dollars between the salary of CEO of a firm with five million dollars in annual sales and the CEO of a firm with annual sales of eight million dollars? (a) -0.3 (b) -0.5 (c) 8 (d) 5 7. What is the probability the salary of CEO is greater than 7 million dollars if the sales is 10 million dollars
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