A Study of the Top MBA Programs Attempted to Predict

question 109

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


$\begin{array} { l c c c l }\text {Predictor}\\ \text { Variables } & \text { Coefficient } & \text { Std Error } & \text { T } & \text { P } \\ \text { Constant } & 169.910 & 26.5350 & 6.40 & 0.0000 \\ \text { Tuition } & - 3.37373 & 0.81171 & - 4.16 & 0.0001 \\ \text { TxT } & 0.03563 & 0.00590 & 6.03 & 0.0000 \end{array}$


$\begin{array} { l c c r } \text { R-Squared } & 0.7361 & \text { Resid. Mean Square (MSE) } & 358.887 \\ \text { Adjusted R-Squared } & 0.7288 & \text { Standard Deviation } & 18.9443 \end{array}$


$\begin{array} { l l c c } \text { Source } & \text { DF } & \text { SS } \\ \text { Regression } & 2 & & 72081.8 \\ \text { Residual } & & 72 & 25839.8 \\ \text { Total } & & 74 & 97921.7 \\ & & & \\ \text { Cases Included } 75 & \text { Missing Cases 0 } \end{array}$
One of the t-test test statistics is shown on the printout to be the value $t = 6.03$ . Interpret this value.

• A) There is sufficient evidence, at \(\alpha = 0.05\), to indicate that at least one of the variables proposed in the interaction model is useful at predicting the average starting salary of graduates of MBA programs.
• B) There is sufficient evidence, at \(\alpha = 0.05\), to indicate that there is a linear relationship between average starting salary of graduates of MBA programs and the tuition of the MBA program.
• C) There is insufficient evidence, at \(\alpha = 0.05\), to indicate that at least one of the variables proposed in the interaction model is useful at predicting the average starting salary of graduates of MBA programs.
• D) There is sufficient evidence, at \(\alpha = 0.05\), to indicate that there is a curvilinear relationship between average starting salary of graduates of MBA programs and the tuition of the MBA program.

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Definitions:

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