A Study of the Top MBA Programs Attempted to Predict

question 43

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



The model was then used to create 95% confidence and prediction intervals for y and for E(Y) when The tuition charged by the MBA program was $75,000 and the GMAT score was 675. The results are Shown here:

95% confidence interval for E(Y) : ($126,610, $136,640)
95% prediction interval for Y: ($90,113, $173,160)

Which of the following interpretations is correct if you want to use the model to estimate E(Y) for All MBA programs?

• A) We are 95% confident that the average starting salary for graduates of a single MBA program that charges $75,000 in tuition and has an average GMAT score of 675 will fall between $90,113 and $173,16,30.
• B) We are 95% confident that the average starting salary for graduates of a single MBA program that charges $75,000 in tuition and has an average GMAT score of 675 will fall between $126,610 and $136,640.
• C) We are 95% confident that the average of all starting salaries for graduates of all MBA programs that charge $75,000 in tuition and have an average GMAT score of 675 will fall Between $126,610 and $136,640.
• D) We are 95% confident that the average of all starting salaries for graduates of all MBA programs that charge $75,000 in tuition and have an average GMAT score of 675 will fall Between $90,113 and $173,16,30.

---

Definitions:

Performance Effectiveness

A measure of how well individuals or organizations achieve their goals and objectives.

Performance Appraisals

The systematic evaluation of an employee's job performance and productivity in relation to certain pre-established criteria and organizational objectives.

Self-managing Work Teams

Groups of employees who are provided with the autonomy to plan, execute, and control their work without direct supervision.

Job Duties

The tasks and responsibilities assigned to an employee as part of their role within an organization.