A Study of the Top MBA Programs Attempted to Predict

question 6

Multiple Choice

A study of the top MBA programs attempted to predict the average starting salary (in $1000's) of graduates of the program based on the amount of tuition (in $1000's) charged by the program and the average GMAT score of the program's students. The results of a regression analysis based on a sample of 75 MBA programs is shown below:

Least Squares Linear Regression of Salary

$\begin{array}{l}\text { Predictor }\\\begin{array}{lcccccccc}\text { Variables } & \text { Coefficient } & {\text { Std Error }} & \text { T } & \text { P } & {\text { VIF }} \\\text { Constant } & -203.402 & 51.6573 & -3.94 & 0.0002 & 0.0 \\\text { Gmat } & 0.39412 & 0.09039 & 4.36 & 0.0000 & 2.0 & \\\text { Tuition } & 0.92012 & 0.17875 & 5.15 & 0.0000 & 2.0 &\end{array}\end{array}$

$\begin{array}{lccc}\text { R-Squared } & 0.6857 & \text { Resid. Mean Square (MSE) } & 427.511 \\\text { Adjusted R-Squared } & 0.6769 & \text { Standard Deviation } & 20.6763\end{array}$

$\begin{array}{lllcccc}\text { Source } & \text { DF } & \text { SS } & \text { MS } & \text { F } & \text { P } \\\text { Regression } & 2 & 67140.9 & 33570.5 & 78.53 & 0.0000 \\\text { Residual } & 72 & 30780.8 & 427.5 & \\\text { Total } & 74 & 97921.7 & &\end{array}$

• A) At \(\alpha = 0.05\), there is insufficient evidence to indicate that something in the regression model is useful for predicting the average starting salary of the graduates of an MBA program.
• B) We expect most of the average starting salaries to fall within \(\$ 20,676\) of their least squares predicted values.
• C) We expect most of the average starting salaries to fall within \(\$ 41,353\) of their least squares predicted values.
• D) We can explain \(68.57 \%\) of the variation in the average starting salaries around their mean using the model that includes the average GMAT score and the tuition for the MBA program.

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Definitions:

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