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A study of the pay of corporate CEOs (chief executive officers) examined the cash compensation, adjusted for inflation, of the CEOs of 104 corporations over the period 1977 to 1988. Among the data are the average annual pay increases for each of the 104 CEOs. The mean percent increase in pay was 6.9%. The data showed great variation, with a standard deviation of 17.4%. The distribution was strongly skewed to the right.
1) Despite the skewness of the distribution, there were no extreme outliers. Explain why we can use t procedures for these data.
2) What are the degrees of freedom?
3) Give a 99% confidence interval for the mean increase in pay for all corporate CEOs.
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