A study of the top 75 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.
The results of a simple linear regression analysis are shown below: Least Squares Linear Regression of Salary
Predictor
R-Squared Resid. Mean Square (MSE)
Adjusted R-Squared Standard Deviation
The model was then used to create confidence and prediction intervals for and for when the tuition charged by the MBA program was . The results are shown here:
95\% confidence interval for :
prediction interval for :
Which of the following interpretations is correct if you want to use the model to estimate for all MBA programs?
A) We are confident that the average of all starting salaries for graduates of all MBA programs that charge in tuition will fall between and .
B) We are confident that the average starting salary for graduates of a single MBA program that charges in tuition will fall between and .
C) We are confident that the average of all starting salaries for graduates of all MBA programs that charge in tuition will fall between and .
D) We are confident that the average starting salary for graduates of a single MBA program that charges in tuition will fall between and .
Correct Answer:
Verified
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