Infs

Hypothesis Testing Paper

Avery Ayers

Feb 3, 2007

Introduction

The requirements are that Team A should examine the percentage of income that employees put into their 401(k) plans per month, with the company also matching a percentage. With the 401(k) data from the two companies; company A – 32 higher earners and company B- 32 lower earners showing the distributions into their accounts from their own and company monthly and a yearly total contributions. The hypothesis review will be based on the two different companies 401 (K) plan, and compare their employee’s percent of elected portion of his or her wages paid directly or deferred into his or her 401(K) account. With this plan the employee can select from a number of investment options, usually from an assortment of mutual funds that is based on bonds, investments, money market or stock. To ensure that companies extend their 401(K) plans to low-paid employees, the IRS rules limits the maximum deferral by the companies highly compensated employees.

Absolute zero measurement

These requirements for the paper are met; by having the minimum value for the percentage put in the 401(k) plan is 0% of a person’s income. Samples of employees at two large companies are given. As with most companies an employee has the option of apply any percentage they can afford deferred from their pay into their 401(K) plan. In this instance company ‘A’ employees had a preference from 0% to 6%, with company ‘A’ matching up to 2% into the 401(K) plan. The other company ‘B’ which pays a lower salary range also matches into the 401(k) plan but up to 5% with a yearly 401(k) bonus of 5% for all employees. The results are given in the following tables.

Interval and Ratio Data

A ratio variable is also similar to an interval variable, however it has a 0.0 definition. An example of a ratio variable is height. When...