CEO compensation In Chapter 5 we saw the distribution of the total compensation of the

Chapter 17, Problem 36

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CEO compensation In Chapter 5 we saw the distribution of the total compensation of the chief executive officers (CEOs) of the 800 largest U.S. companies (the Fortune 800). The average compensation (in thousands of dollars) is 10,307.31 and the standard deviation is 17,964.62. Here is a histogram of their annual compensations (in $1000): a) Describe the histogram of Total Compensation. A research organization simulated sample means by drawing samples of 30, 50, 100, and 200, with replacement, from the 800 CEOs. The histograms show the distributions of means for many samples of each size. b) Explain how these histograms demonstrate what the Central Limit Theorem says about the sampling distribution model for sample means. Be sure to talk about shape, center, and spread. c) Comment on an oft-cited rule of thumb that With a sample size of at least 30, the sampling distribution of the mean is Normal.