Using techniques from an earlier section, we can find a confidence interval for _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 _d is as follows.d E < _d < d + E

where E = t_cs_dn

c = confidence level (0 < c < 1)

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

B: Percent increase

for company 4 26 6 18 6 4 21 37 A: Percent increase

for CEO 24 20 30 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 1 upper limit 2

(b) Use the confidence interval method of hypothesis testing to test the hypothesis that population mean percentage increase in company revenue is different from that of CEO salary. Use a 5% level of significance. Since _d = 0 from the null hypothesis is in the 95% confidence interval, do not reject H₀ at the 5% level of significance. The data do not indicate a difference in population mean percentage increases between company revenue and CEO salaries.

Since _d = 0 from the null hypothesis is not in the 95% confidence interval, do not reject H₀ at the 5% level of significance. The data indicate a difference in population mean percentage increases between company revenue and CEO salaries.

Since _d = 0 from the null hypothesis is not in the 95% confidence interval, reject H₀ at the 5% level of significance. The data indicate a difference in population mean percentage increases between company revenue and CEO salaries.

Since _d = 0 from the null hypothesis is in the 95% confidence interval, reject H₀ at the 5% level of significance. The data do not indicate a difference in population mean percentage increases between company revenue and CEO salaries.