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A Study of the Top MBA Programs Attempted to Predict y=y =

Question 7

Multiple Choice

A study of the top MBA programs attempted to predict y=y = the average starting salary (in $1000\$ 1000 's) of graduates of the program based on x=x = the amount of tuition (in $1000\$ 1000 's) charged by the program. After first considering a simple linear model, it was decided that a quadratic model should be proposed. Which of the following models proposes a 2nd-order quadratic relationship between xx and yy ?


A) E(y) =β0+β1x1\mathrm { E } ( \mathrm { y } ) = \beta _ { 0 } + \beta _ { 1 } \mathrm { x } _ { 1 }
B) E(y) =β0+β1x1+β2x12\mathrm { E } ( \mathrm { y } ) = \beta _ { 0 } + \beta _ { 1 } \mathrm { x } _ { 1 } + \beta _ { 2 } \mathrm { x } _ { 1 } ^ { 2 }
C) E(y) =β0+β1x1+β2x12+β3x13\mathrm { E } ( \mathrm { y } ) = \beta _ { 0 } + \beta _ { 1 } \mathrm { x } _ { 1 } + \beta _ { 2 } \mathrm { x } _ { 1 } ^ { 2 } + \beta _ { 3 } \mathrm { x } _ { 1 } ^ { 3 }
D) E(y) =β0+β1x1+β2x2+β3x1x2\mathrm { E } ( \mathrm { y } ) = \beta _ { 0 } + \beta _ { 1 } \mathrm { x } _ { 1 } + \beta _ { 2 } \mathrm { x } _ { 2 } + \beta _ { 3 } \mathrm { x } _ { 1 } \mathrm { x } _ { 2 }

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