GPA (grade point average) is believed to have a significant positive impact on t

Question

GPA (grade point average) is believed to have a significant positive impact on the starting salary of college graduates. A regression model relating starting salary to GPA is specified as S = 0 + 1GPA + e, where, S is the annual salary in thousands and e is the error term. Estimation of this model using annual data of 25 randomly selected recent graduates produced the following regression statistics.

Variable Coefficient Estimate t-statistic

Intercept 17.315 2.896

GPA 5.785 3.500

a. Is GPA a significant determinant of annual salary at 5% significance level? (Hint:Test Ho: 1 = 0 vs HA: 1 0 at = 0.05). b. Write the estimated regression equation. c. According to this regression equation, what would be the starting salary of a graduate with 3.75 GPA? D. What percent of the variation in the starting salary is explained by this regression model?

Explanation / Answer

a) HO: 1=0 vs HA: 10

Given the los be = 0.05

Test statistic of GPA is t = 3.5

The critical value of the test is 2.306 at 5% los and n-2 = 8 df in t - tables

Here t value > t crit value, we reject H0.

Thus we conclude that 10

b) The estimated regression equation is

annual salary S = 17.315 + 5.785GPA

c) The starting salary of a graduate with 3.75 GPA is

a) HO: 1=0 vs HA: 10

Given the los be = 0.05

Test statistic of GPA is t = 3.412

The critical value of the test is 2.306 at 5% los and n-2 = 8 df in t - tables

Here t value > t crit value, we reject H0.

Thus we conclude that 10

b) The estimated regression equation is

annual salary S = 17.315 + 5.785GPA

c) The starting salary of a graduate with 3.75 GPA is

             S = 17.315 + 5.785 (3.75) = 39.88

d) The percent of the variation in the starting salary is not explained by this regression model is

         1 - r2 = 1 - 0.85 = 0.15 = 15%

) = 38.9175

d) The percent of the variation in the starting salary is not explained by this regression model is

         1 - r2.

But r2 is missing here.

hope this will be helpful.thanks :) God Bless you :-)

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