A study on the pay of CEOs examined the percentage increase in cash compensation of the CEOs of 104 companies, adjusted for inflation, in recent years. The mean percentage increase in real compensation was and sample standard deviation of 5.3%. Is this good evidence that the mean percentage increase in real compensation of all CEOs is larger than zero?

Write down the test hypotheses

Compute the test statistic and the p-value

Is the result significant at the 5% significance level?

Compute a 95% Confidence Interval for the mean increase of real compensation of CEOs. Based on this C.I., are you convinced that the mean percentage compensation has been increasing?

Are you surprised that the results in c) and d) lead to the same conclusions?