SOLUTION: The issues surrounding the levels and structure of executive compensation have gained added prominence in the wake of the financial crisis that erupted in the fall of 2008. Based o

Question 1171752: The issues surrounding the levels and structure of executive compensation have gained added prominence in the wake of the financial crisis that erupted in the fall of 2008. Based on the 2006 compensation data obtained from the securities and exchange commission (SEC) website, it was determined that the mean and the standard deviation of the compensation for the 500 paid CEOs in publicly traded U.S. companies are $10.32 million and $9.78 million, respectively. An analyst randomly choses 32 CEO compensations for 2006.
What is the probability that the sample mean is between $10 million to $12 million?
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
The distribution of the sample mean of a sample of 32 is 9.78/sqrt(32)=$1.729 million
The probability: z=(10-10.32)/1.729 or -0.1851
and z=(12-10.32)/1.729 or 0.9717
That probability between those two values is 0.4078
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