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 $1000ʹs) of graduates of the program based on the amount of tuition (in $1000ʹs) charged by the program and
The average GMAT score of the programʹs students. The results of a regression analysis based on a
Sample of 75 MBA programs is shown below: Least Squares Linear Regression of Salary

$\begin{array}{l}\text { Predictor }\\\begin{array}{lcccccc}\text { Variables } & \text { Coefficient } & \text { Std Error } & \text { T } & \text { P } & \text { VIF } \\\text { Constant } & -203.402 & 51.6573 & -3.94 & 0.0002 & 0.0 \\\text { Gmat } & 0.39412 & 0.09039 & 4.36 & 0.0000 & 2.0 \\\text { Tuition } & 0.92012 & 0.17875 & 5.15 & 0.0000 & 2.0 & \\& & & & & & \\\text { R-Squared } & 0.6857 & \text { Resid. Mean Square (MSE) } & 427.511 \\\text { Adjusted R-Squared } & 0.6769 &{\text { Standard Deviation }} & 20.6763\end{array}\end{array}$

Interpret the coefficient for the tuition variable shown on the printout.

• A) For every \(\$ 1000\) increase in the tuition charged by the MBA program, we estimate that the average starting salary will decrease by \(\$ 203,402\), holding the GMAT score constant.
• B) For every \(\$ 1000\) increase in the average starting salary, we estimate that the tuition charged by the MBA program will increase by \(\$ 920.12\).
• C) For every \(\$ 1000\) increase in the tuition charged by the MBA program, we estimate that the average starting salary will increase by \(\$ 920.12\), holding the GMAT score constant
• D) For every \(\$ 1000\) increase in the tuition charged by the MBA program, we estimate that the average starting salary will increase by \(\$ 394.12\), holding the GMAT score constant

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