Profits: Banks Jobs and productivity! How do banks rate? One way to answer
this question is to examine annual profits per employee. Forbes Top Companies,
edited by J. T. Davis (John Wiley \& Sons), gave the following data about
annual profits per employee (in units of one thousand dollars per employee)
for representative companies in financial services. Companies such as Wells
Fargo, First Bank System, and Key Banks were included. Assume \(\sigma \approx
10.2\) thousand dollars.$$
\begin{array}{lllllllllll}
42.9 & 43.8 & 48.2 & 60.6 & 54.9 & 55.1 & 52.9 & 54.9 & 42.5 & 33.0 & 33.6 \\
36.9 & 27.0 & 47.1 & 33.8 & 28.1 & 28.5 & 29.1 & 36.5 & 36.1 & 26.9 & 27.8 \\
28.8 & 29.3 & 31.5 & 31.7 & 31.1 & 38.0 & 32.0 & 31.7 & 32.9 & 23.1 & 54.9 \\
43.8 & 36.9 & 31.9 & 25.5 & 23.2 & 29.8 & 22.3 & 26.5 & 26.7 & &
\end{array}
$$
(a) Use a calculator or appropriate computer software to verify that, for the
preceding data, \(\bar{x} \approx 36.0\).
(b) Let us say that the preceding data are representative of the entire sector
of (successful) financial services corporations. Find a \(75 \%\) confidence
interval for \(\mu\), the average annual profit per employee for all successful
banks.
(c) Interpretation Let us say that you are the manager of a local bank with a
large number of employees. Suppose the annual profits per employee are less
than 30 thousand dollars per employee. Do you think this might be somewhat low
compared with other successful financial institutions? Explain by referring to
the confidence interval you computed in part (b).
(d) Interpretation Suppose the annual profits are more than 40 thousand
dollars per employee. As manager of the bank, would you feel somewhat better?
Explain by referring to the confidence interval you computed in part (b).
(e) Repeat parts (b), (c), and
(d) for a \(90 \%\) confidence level.