A minority representation group accuses a major bank of racial discrimination in its recent hires for financial analysts. Exactly 16% of all applications were from minority members, and exactly 15% of the 2100 open positions were filled by members of the minority.

Required:
a. Find the mean of p, where p is the proportion of minority member applications in a random sample of 2100 that is drawn from all applications.
b. Find the standard deviation of p.

The Central Limit Theorem establishes that, for a normally distributed random variable X, with mean [tex]\mu[/tex] and standard deviation [tex]\sigma[/tex], the sampling distribution of the sample means with size n can be approximated to a normal distribution with mean [tex]\mu[/tex] and standard deviation [tex]s = \frac{\sigma}{\sqrt{n}}[/tex].

For a skewed variable, the Central Limit Theorem can also be applied, as long as n is at least 30.

For a proportion p in a sample of size n, the sampling distribution of the sample proportion will be approximately normal with mean [tex]\mu = p[/tex] and standard deviation [tex]s = \sqrt{\frac{p(1-p)}{n}}[/tex]

Question a:

Exactly 16% of all applications were from minority members

This means [tex]p = 0.16[/tex], and thus, the mean is of [tex]\mu = p = 0.16[/tex]

b. Find the standard deviation of p.

2100 open positions, thus [tex]n = 2100[/tex].

[tex]s = \sqrt{\frac{p(1-p)}{n}}[/tex]

[tex]s = \sqrt{\frac{0.16*0.84}{2100}}[/tex]

[tex]s = 0.008[/tex]

The standard deviation is of [tex]s = 0.008[/tex]