BUSI 410 Module 14 Lab Session 5

Midterm grades Average = 65.5, stdev.s = 14.65, skew = -0.4 Median = 67.5, IQR = (53.25, 77)

Start by Downloading the files from Canvas=>Modules=>14: Lab 5 Executive Compensation_student.xlsx Lab 5 Hollywood Politics_student.xlsx Histogram bins -3 to +3.xlsx Follow instructions on Lab Session #5 worksheet to analyze data and create informative graphics

Executive Compensation Before Removing Any Outliers The data are sorted from lowest compensation (Citizens Bancorp at $30,000) to highest (American Express at $4,490,000). The average compensation is $1,370,000, the standard deviation of compensation is $990,000, and skewness is 1.24

Calculating frequencies Copy the histogram template from “Histogram bins -3 to +3.xlsx”… Paste into the data sheet, set mean and stdev to be equal to data mean and stdev

Calculating frequencies Under the “Data” tab, click on Data Analysis, choose Histogram

Calculating frequencies Select data range as Input Range, “bins in sds…” as Bin Range, check Labels if included labels in selection, then click on OK

1st Histogram There are two outliers – American Express and Citicorp. We need to exclude them from the data set Now, remove these 2 outliers from the data set and make another updated histogram.

2nd Histogram On this second round one more outlier is found at the top end of the data set – PNC Bank. Begin task 2 Now, remove this outlier from the data set and make another updated histogram.

3rd Histogram End of task 2 On this third round no more outliers are found, and the statistics (all in millions of dollars) for this “typical” sample are shown above.

Generate percentages Select both columns, insert a column chart Calculate sum of all frequencies (= sample size) Copy and paste “% if Normal” from template Begin task 3 Calculate percentage of each frequency of sum

Executive Compensation The sample mean These histograms show the same result as the previous slide. The actual distribution (blue) differs significantly from the Normal distribution (red), especially in the regions within one standard deviation of the mean. End of task 3

Executive Compensation 25% of executives earn more than $1.62MM Task 4 Half of executives earn less than $0.98MM 25% of executives earn less than $0.64MM Half of executives earn between $1.62 and $0.64 MM

Executive Compensation Both the graph and the ranked percentile table show that a $2 million compensation package will rank in about the 80th percentile – a nice package!

Hollywood Politics CBS News/New York Times Poll. Sept. 4-9, 2015. N=1,263 adults nationwide. MoE ± 3 (for all adults). "Which of these comes closest to your opinion? Hollywood celebrities are inexperienced about political issues and should stay out of politics. OR, Hollywood celebrities can offer a new perspective on political issues and should get involved in politics if they choose." Party Stay Out % Get Involved % Depends/ Not Sure% Republicans 69 27 4 Democrats 33 61 6 Independents 45 49 All these proportions have a reported margin of error of ± 3 percentage points Percent of Republicans who prefer celebrities to stay out: 69% ± 3% = 66% to 72% Percent of Democrats who prefer celebrities to stay out: 33% ± 3% = 30% to 36%

Hollywood Politics In any graph make sure you include: A descriptive title Well-labeled axes If you are reporting proportions, a margin of error Summary: Relative to Democrats, a significantly higher proportion of Republicans would prefer celebrities to stay out of politics. People with Independent political affiliations lie somewhere in between Democrats and Republicans.

Next Class Hypothesis Tests Will be a tough class! Read Chapter 3.1, 3.2, 3.7, 3.10 of the textbook