A Study of the Top MBA Programs Attempted to Predict

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:

Least Squares Linear Regression of Salary


$\begin{array} { l c c c l }\text {Predictor}\\ \text { Variables } & \text { Coefficient } & \text { Std Error } & \text { T } & \text { P } \\ \text { Constant } & 169.910 & 26.5350 & 6.40 & 0.0000 \\ \text { Tuition } & - 3.37373 & 0.81171 & - 4.16 & 0.0001 \\ \text { TxT } & 0.03563 & 0.00590 & 6.03 & 0.0000 \end{array}$


$\begin{array} { l c c r } \text { R-Squared } & 0.7361 & \text { Resid. Mean Square (MSE) } & 358.887 \\ \text { Adjusted R-Squared } & 0.7288 & \text { Standard Deviation } & 18.9443 \end{array}$


$\begin{array} { l l c c } \text { Source } & \text { DF } & \text { SS } \\ \text { Regression } & 2 & & 72081.8 \\ \text { Residual } & & 72 & 25839.8 \\ \text { Total } & & 74 & 97921.7 \\ & & & \\ \text { Cases Included } 75 & \text { Missing Cases 0 } \end{array}$
One of the t-test test statistics is shown on the printout to be the value $t = 6.03$ . 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 sufficient evidence, at $\alpha = 0.05$ , to indicate that there is a linear relationship between average starting salary of graduates of MBA programs and the tuition of the MBA program.
C) 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.
D) There is sufficient evidence, at $\alpha = 0.05$ , to indicate that there is a curvilinear relationship between average starting salary of graduates of MBA programs and the tuition of the MBA program.