A sample of 33 companies was randomly selected and data collected on the average

Question

A sample of 33 companies was randomly selected and data collected on the average annual bonus, turnover rate (%), and trust index (measured on a scale of 0-100). The regression coefficient associated with Average Bonus was found to be 0.0007216. What is the interpretation of this value?

A. An increase of $100 in the average annual bonus decreases the turnover rate by 7.2%.

B. Holding the trust index constant, increasing the average annual bonus by $100 will decrease the turnover rate by 7.2%.

C. For companies that have the same score on the trust index, increasing the average annual bonus by $100 is associated with an increase in turnover rate of 7.2%, on average.

D. For companies that have the same score on the trust index, increasing the average annual bonus by $100 is associated with a decrease in turnover rate of 7.2%, on average.

Explanation / Answer

The interpretation of this value will be:

For companies that have the same score on the trust index, increasing the average annual bonus by $100 is associated with a decrease in turnover rate of 7.2%, on average.

Option D is correct.

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