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A Study of the Top MBA Programs Attempted to Predict 95%95 \%

Question 38

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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
Predictor
 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 Predictor    The model was then used to create  95 \%  confidence and prediction intervals for  y  and for  E ( Y )   when the tuition charged by the MBA program was  \$ 75,000  and the GMAT score was 675 . The results are shown here:  95 \%  confidence interval for  \mathrm { E } ( \mathrm { Y } )   :  ( \$ 126,610 , \$ 136,640 )    95 \%  prediction interval for  Y  :  ( \$ 90,113 , \$ 173,160 )   Which of the following interpretations is correct if you want to use the model to estimate  Y  for a single MBA program? A)  We are  95 \%  confident that the average starting salary for graduates of a single MBA program that charges  \$ 75,000  in tuition and has an average GMAT score of 675 will fall between  \$ 126,610  and  \$ 136,640 . B)  We are  95 \%  confident that the average starting salary for graduates of a single MBA program that charges  \$ 75,000  in tuition and has an average GMAT score of 675 will fall between  \$ 90,113  and  \$ 173,16,30 . C)  We are  95 \%  confident that the average of all starting salaries for graduates of all MBA programs that charge  \$ 75,000  in tuition and have an average GMAT score of 675 will fall between  \$ 90,113  and  \$ 173,16,30 . D)  We are  95 \%  confident that the average of all starting salaries for graduates of all MBA programs that charge  \$ 75,000  in tuition and have an average GMAT score of 675 will fall between  \$ 126,610  and  \$ 136,640 .

The model was then used to create 95%95 \% confidence and prediction intervals for yy and for E(Y) E ( Y ) when the tuition charged by the MBA program was $75,000\$ 75,000 and the GMAT score was 675 . The results are shown here:
95%95 \% confidence interval for E(Y) \mathrm { E } ( \mathrm { Y } ) : ($126,610,$136,640) ( \$ 126,610 , \$ 136,640 )
95%95 \% prediction interval for YY : ($90,113,$173,160) ( \$ 90,113 , \$ 173,160 )
Which of the following interpretations is correct if you want to use the model to estimate YY for a single MBA program?


A) We are 95%95 \% confident that the average starting salary for graduates of a single MBA program that charges $75,000\$ 75,000 in tuition and has an average GMAT score of 675 will fall between $126,610\$ 126,610 and $136,640\$ 136,640 .
B) We are 95%95 \% confident that the average starting salary for graduates of a single MBA program that charges $75,000\$ 75,000 in tuition and has an average GMAT score of 675 will fall between $90,113\$ 90,113 and $173,16,30\$ 173,16,30 .
C) We are 95%95 \% confident that the average of all starting salaries for graduates of all MBA programs that charge $75,000\$ 75,000 in tuition and have an average GMAT score of 675 will fall between $90,113\$ 90,113 and $173,16,30\$ 173,16,30 .
D) We are 95%95 \% confident that the average of all starting salaries for graduates of all MBA programs that charge $75,000\$ 75,000 in tuition and have an average GMAT score of 675 will fall between $126,610\$ 126,610 and $136,640\$ 136,640 .

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