A Study of the Top MBA Programs Attempted to Predict $$\text { Least Squares Linear Regression of Salary }$$

question 124

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: $$\text { Least Squares Linear Regression of Salary }$$

$\begin{array}{l}\text { Predictor }\\\begin{array}{lccccc}\text { Variables } & \text { Coefficient } & \text { Std Error } & \text { T } & \text { P } \\\text { Constant } & -687.851 & 165.406 & 4.16 & 0.0001 \\\text { Tuition } & -11.3197 & 2.19724 & -5.15 & 0.0000 \\\text { GMAT } & -0.96727 & 0.25535 & -3.79 & 0.0003 \\\text { TxG } & 0.01850 & 0.00331 & 5.58 & 0.0000\end{array}\end{array}$

$\begin{array}{lccc}\text { R-Squared } & 0.7816 & \text { Resid. Mean Square (MSE) } & 301.251 \\\text { Adjusted R-Squared } & 0.7723 & \text { Standard Deviation } & 17.3566\end{array}$

$\begin{array}{lllcccc}\text { Source } & \text { DF } & & \text { SS } & \text { MS } & \text { F } & \text { P } \\\text { Regression } & 3 & & 76523.8 & 25510.9 & 84.68 & 0.0000 \\\text { Residual } & & 71 & 21388.8 & 301.3 & \\\text { Total } & & 74 & 97921.7 & &\end{array}$

Cases Included 75 Missing Cases 0 One of the t-test test statistics is shown on the printout to be value $t = 5.58$ . Interpret this value.

• A) There is sufficient evidence, at \(\alpha = 0.05\), to indicate that the interaction between average tuition and average GMAT score is a useful predictor of the average starting salary of graduates of MBA programs.
• B) 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.
• C) 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.
• D) There is insufficient evidence, at \(\alpha = 0.05\), to indicate that the interaction between average tuition and average GMAT score is a useful predictor of the average starting salary of graduates of MBA programs.

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