6540 Lecture Notes - Lecture 5: Unimodality, Randomized Experiment, Normal Distribution

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Based on mean of all possible collected samples - not original data set, mean of all possible samples. The central limit theorem (clt: the ce(cid:374)t(cid:396)al li(cid:373)it theo(cid:396)e(cid:373) The sampling distribution of any mean becomes nearly normal as the sample size grows. If you keep increasing size then the distribution will look closer to normal shape: re(cid:395)ui(cid:396)e(cid:373)e(cid:374)ts. Sample size condition: the sa(cid:373)pli(cid:374)g dist(cid:396)i(cid:271)utio(cid:374) of the (cid:373)ea(cid:374)s is (cid:272)lose to no(cid:396)(cid:373)al if either: The total compensation of the chief executive officers (ceos) of the 800 largest u. s. companies (the fortune 800) averaged (in thousands of dollars) 10,307. 31 with a standard deviation (also in ) of 17,964. 62. Here is a histogram of their annual compensations (in. The distribution of total compensation for the ceos of the 800 largest u. s. companies is unimodal, but skewed to the right with several large outliers. Explain how these histograms demonstrate what the central limit. Theorem says about the sampling distribution model for sample means.

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