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

$\begin{array}{l}\text { Predictor }\\\begin{array}{lcccccccc}\text { Variables } & \text { Coefficient } & {\text { Std Error }} & \text { T } & \text { P } & {\text { VIF }} \\\text { Constant } & -203.402 & 51.6573 & -3.94 & 0.0002 & 0.0 \\\text { Gmat } & 0.39412 & 0.09039 & 4.36 & 0.0000 & 2.0 & \\\text { Tuition } & 0.92012 & 0.17875 & 5.15 & 0.0000 & 2.0 &\end{array}\end{array}$

$\begin{array}{lccc}\text { R-Squared } & 0.6857 & \text { Resid. Mean Square (MSE) } & 427.511 \\\text { Adjusted R-Squared } & 0.6769 & \text { Standard Deviation } & 20.6763\end{array}$

$\begin{array}{lllcccc}\text { Source } & \text { DF } & \text { SS } & \text { MS } & \text { F } & \text { P } \\\text { Regression } & 2 & 67140.9 & 33570.5 & 78.53 & 0.0000 \\\text { Residual } & 72 & 30780.8 & 427.5 & \\\text { Total } & 74 & 97921.7 & &\end{array}$

A) At $\alpha = 0.05$ , there is insufficient evidence to indicate that something in the regression model is useful for predicting the average starting salary of the graduates of an MBA program.
B) We expect most of the average starting salaries to fall within $\$ 20,676$ of their least squares predicted values.
C) We expect most of the average starting salaries to fall within $\$ 41,353$ of their least squares predicted values.
D) We can explain $68.57 \%$ of the variation in the average starting salaries around their mean using the model that includes the average GMAT score and the tuition for the MBA program.