Question: A study of the pay of corporate chief executive officers (CEOs) examined the increase in cash compensation of the CEOs of 100 companies, adjusted for inflation, in a recent year. The mean increase in compensation was \[\bar{x}=6.9%\] , and the standard deviation of the increases was s = 55%. Is this good evidence that the mean real compensation of all CEOs increased that year?

1. What are the null and one-sided alternative hypotheses?
2. Sketch the sampling distribution of the sample mean increase in compensation if the null hypothesis is true and if the population standard deviation = 55%.
3. Shade the area under the curve that represents the P -value for the observed outcome \[\bar{x}=6.9%\] .
4. Does it look like the result is significant at the 5% level?
5. Obtain the P -value with the help of Table A. Is the result significant at the 5% level?

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