It is desired to estimate the average total compensation of CEOs in the Service industry.Data were randomly collected from 18 CEOs and the 95% confidence interval was calculated to be ($2,181,260,$5,836,180)
-Which of the following interpretations is correct?
A) 95% of the sampled total compensation values fell between $2,181,260 and $5,836,180.
B) In the population of Service industry CEOs, 95% of them will have total compensations that fall in the interval $2,181,260 to $5,836,180.
C) We are 95% confident that the mean of the sampled CEOs falls in the interval $2,181,260 to $5,836,180.
D) We are 95% confident that the average total compensation of all CEOs in the Service industry falls in the interval $2,181,260 to $5,836,180.

Question

Quizplus · Accepted Answer

The 95% confidence interval is calculated for the population mean of total compensations of all CEOs in the Service industry based on the sample data. Therefore, we can be 95% confident that the population mean of total compensations falls within the interval of $2,181,260 to $5,836,180. Option A refers to the sampled values, not the population, and option B is too broad to be considered accurate. Option C is partially correct in terms of confidence, but it does not provide information on the population being studied.

It Is Desired to Estimate the Average Total Compensation of CEOs