A Study of the Top 75 MBA Programs Attempted to Predict

question 50

Multiple Choice

A study of the top 75 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. The results of a simple linear regression analysis are shown below:
$$\begin{array}{l}\text { Least Squares Linear Regression of Salary }\\\begin{array} { l r c c l } \text { Predictor } & & & & \\\text { Variables } & \text { Coefficient } & \text { Std Error } & \text { T } & \text { P } \\\text { Constant } & 18.1849 & 10.3336 & 1.76 & 0.0826 \\\text { Size } & 1.47494 & 0.14017 & 10.52 & 0.0000 \\& & & \\\text { R-Squared } & 0.6027 & \text { Resid. Mean Square (MSE) } & 532.986 \\\text { Adjusted R-Squared } &0.5972 & \text { Standard Deviation } & 23.0865\end{array}\end{array}$$
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. The results are shown here:
95% confidence interval for E(Y) : ($123,390, $134,220)
95% prediction interval for Y: ($82,476, $175,130)

Which of the following interpretations is correct if you want to use the model to predict Y for a single MBA programs?

• A) We are 95% confident that the average of all starting salaries for graduates of all MBA programs that charge $75,000 in tuition will fall between $82,476 and $175,130.
• B) We are 95% confident that the average starting salary for graduates of a single MBA program that charges $75,000 in tuition will fall between $82,476 and $175,130.
• C) We are 95% confident that the average starting salary for graduates of a single MBA program that charges $75,000 in tuition will fall between $123,390 and $134,220.
• D) We are 95% confident that the average of all starting salaries for graduates of all MBA programs that charge $75,000 in tuition will fall between $123,390 and $134,220.

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Definitions:

Diathermy

A medical and surgical technique involving the use of high-frequency electric currents to heat deep muscular tissues, reducing pain and improving circulation.

Therm

A unit of heat energy, equivalent to 100,000 British thermal units (BTUs), used mainly for heating.

Hemopoiesis

The production of all types of blood cells in the bone marrow, including red blood cells, white blood cells, and platelets.

Muscular System

The biological system that comprises of all the muscles in the body and enables movement, both voluntary and involuntary, as well as posture maintenance.