31. Mortgage Industry Employees. In an issue of National Mortgage News, a special report was published on publicly traded mortgage industry companies. A sample of 25mortgage industry companies had the following numbers of employees.

a. Obtain a normal probability plot of the data.
b. Use part (a) to identify any outliers.
c. Use part (a) to assess the normality of the variable under consideration.

Short Answer

Expert verified

(a) The plot of the data for a normal probability as:

(b) No outliers are found.

(c) The observations will not satisfy the normality.

Step by step solution

01

Part (a) Step 1: Given information

A sample of 25mortgage industry companies had the following numbers of employees.

260
20,800
1,801
2,073
3,596
3,223
2,128
1,796
17,540
15
29,272
6,929
2,468
7,000
6,600
2,458
3,216
209
726
9,200
650
4,800
19,400
24,886
3,082
02

Part (a) Step 2: Explanation

The random variable X's z- score is calculated as follows:
z=x-μσwhere, μindicates the mean and σ indicates the standard deviation.
The mean is μ=6965.12
The variance is σ=8415.98759
The z-scores for the given values are listed in the table below:

Number of Employee
z-score
Number of Employee
z-score
260
-0.7967
209
-0.8028
3223
-0.4446
19400
1.47753
29272
2.65054
2073
-0.5813
2458
-0.5355
17540
1.25652
650
-0.7504
7000
0.00414
20800
1.64388
726
-0.7413
2128
-0.5748
24886
2.12939
6929
-0.0043
3596
-0.4003
3216
-0.4455
15
-0.8258
4800
-0.2573
6600
-0.0434
1801
-0.6136
9200
0.26555
1796
-0.6142
3082
-0.4614
2468
-0.5344


03

Part (a) Step 3: Explanation

The number of employees is plotted on the horizontal axis, while the normal scores are plotted on the vertical axis.

04

Part (b) Step 1: Given information

To identify the outliers by using part (a).

05

Part (b) Step 2: Explanation

An outlier is a data point that deviates from the plot's overall pattern.
There isn't a single observation that deviates from the plot's overall pattern.
As a result, there are no outliers.

06

Part (c) Step 1: Given information

To assess the normality of the variable under consideration by using part (a).

07

Part (c) Step 2: Explanation

The values of the sample are normally distributed if the normal probability plot is generally linear.
The plot does not follow a linear pattern.
As a result, the observations will fail to satisfy the normal requirement.

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