An Academic Advisor Wants to Predict the Typical Starting Salary $$\hat { \beta _ { 0 } } = - 92040 \hat { \beta } 1 = 228 s = 3213 r ^ { 2 } = .66 r = .81 \quad \mathrm { df } = 23 \quad t = 6.67$$

question 18

Multiple Choice

An academic advisor wants to predict the typical starting salary of a graduate at a top business school using the GMAT score of the school as a predictor variable. A simple linear regression of
SALARY versus GMAT using 25 data points is shown below. $$\hat { \beta _ { 0 } } = - 92040 \hat { \beta } 1 = 228 s = 3213 r ^ { 2 } = .66 r = .81 \quad \mathrm { df } = 23 \quad t = 6.67$$
Give a practical interpretation of $r ^ { 2 } = .66$ .

• A) \(66 \%\) of the sample variation in SALARY can be explained by using GMAT in a straight -line model.
• B) We can predict SALARY correctly \(66 \%\) of the time using GMAT in a straight-line model.
• C) We estimate SALARY to increase \(\$ .66\) for every 1 -point increase in GMAT.
• D) We expect to predict SALARY to within \(2 [ \sqrt { .66 } ]\) of its true value using GMAT in a straight-line model.

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Definitions:

Reliable Method

A consistent and dependable approach or technique that yields accurate and reproducible results over time.

Valid Method

A research or measurement technique that accurately reflects or measures what it is intended to.

Heritability

Refers to the proportion of variation among individuals that we can attribute to genes. The heritability of a trait may vary, depending on the range of populations and environments studied.

White Middle-Class

A socioeconomic group characterized by individuals of European descent with moderate to high income levels and education.