Each year U.S News & World Report conducts its \"Survey of America\'s Best Gradu

Question

Each year U.S News & World Report conducts its "Survey of America's Best Graduate and professional Schools" The kip 25 business school in 1991, as determined by regulation, student selectivity, placement excess, and graduation rate, are listed in the table. For each school, three variable were measured (1) GMAT score for the typical incoming student; (2) student acceptance rate percentage of all students who applied, and (3) starting salary of the typical graduating student. The academic advisor wants to predict the typical starting salary of a graduate at a top business school using GMAT score of the school as a predictor variable. A simple linear regression of SALARY verses GNAT using 25 data points are shown below mu_0 = -92040 mu_a = 228 s = 3213 r^2 = 66 r = 81 d = 23 t-test statistic for slope = 6.67 For the situation above, give a practical interpretation of r^2 = 66. A. 66% of the sample variation in SALARY is explained by variation in GMAT. We estimate SALARY to increase $.66 for every 1-point increase in GMAT. We can predict SALARY correctly 66% of the time using GMAT in a straight-line model. 66% of the sample variation in GMAT is explained by variation in SALARY.

Explanation / Answer

ANSWER: (A)

EXPLANATION:

Here GMAT score is Independent variable and Salary is the dependent variable

The coefficient of determination (r2) = 0.66 = 66%

INTERPRETATION : 66% OF THE VARIATION IN THE DEPENDENT VARIABLE(SALARY) IS EXPLAINED BY ONLY THE INDEPENDENT VARIABLE (GMAT SCORE)

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