A Study of the Top MBA Programs Attempted to Predict $t$

question 32

Short Answer

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

Cases Included 75 Missing Cases 0
One of the $t$ -test test statistics is shown on the printout to be the value $t = 5$ . 58 . 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 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 the interaction between average tuition and average GMAT score is a useful predictor of 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.

• 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 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 the interaction between average tuition and average GMAT score is a useful predictor of 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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Definitions:

Factoring

A financial transaction where a business sells its accounts receivable to a third party (the factor) at a discount, in order to receive immediate cash.

With Recourse

A term indicating that if the primary party defaults on an obligation, the lender or third party has the right to seek repayment from the signer of the instrument.

Factoring Without Recourse

A financial transaction where a business sells its invoices to a third party without the obligation of repurchase if the invoices go unpaid.

Bad Receivables

Amounts owed to a company that are unlikely to be paid by the debtor, often due to financial difficulty.