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
Variables Coefficient Std Error T P
Constant 18.1849 10.3336 1.76 0.0826
Size 1.47494 0.14017 10.52 0.0000
R-Squared 0.6027 Resid. Mean Square (MSE) 532.986
Adjusted R-Squared 0.5972 Standard Deviation 23.0865
In addition, we are told that the coefficient of correlation was calculated to be r = 0.7763. Interpret this result.
◦ There is almost no linear relationship between the amount of tuition charged and the average starting salary variables.
◦ There is a fairly strong negative linear relationship between the amount of tuition charged and the average starting salary variables.
◦ There is a very weak positive linear relationship between the amount of tuition charged and the average starting salary variables.
◦ There is a fairly strong positive linear relationship between the amount of tuition charged and the average starting salary variables.
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