Problem 1.

The Wall Street Journal CEO Compensation Study analyzed CEO pay from many U.S. companies with fiscal year revenue of at least $5 billion that filed their proxy statements in 2008. The data are in worksheet Problem 1 Data. The variable "Total Pay" shows the sum of salary and bonuses in 2008 for each CEO.

1a) Create side-by-side boxplots of total pay broken down by company type. Include a screenshot of the box plots in your Excel file (2 points)

1b) Based on the box plots, which company type has the highest median total pay? Which company type has the lowest median total pay? (2 points)

Problem 2.

A car dealership has two types of customers, those who buy sports cars and those who buy family sedans. Based on past data on car purchases, it is found that 20% of customers buy sports cars. Of the customers who buy sports cars, 75% pay with credit (they take out a loan). Customers who buy family sedans, however, are much less likely to pay with credit: only 20% of family sedan purchasers pay with credit. If a customer does not pay with credit, then he/she pays cash.

2a) What is the probability that a randomly selected customer will pay with credit? (WORK REQUIRED

2b) What is the probability that a randomly selected customer will pay cash? (WORK REQUIRED

2c) Suppose that a customer agrees to pay cash rather than pay with credit. What is the probability that the customer plans to purchase a family sedan? (WORK REQUIRED

2d) It is further given that 60% of the customers who pay with credit will default subsequently. What is the probability that a customer will pay with credit and default on his/her loan? (WORK REQUIRED