An academic advisor wants to predict the typical starting salary of a graduate a

Question

An academic advisor wants to predict the typical starting salary of a graduate at a top business school using the GMAT score of the school as a predictor variable. A simple linear regression of SALARY versus GMAT using 25 data points is shown below. beta_0 = -92040 beta_1 = 228 s = 3213 r^2 = 66 r = 81 df = 23 t = 6.67 Give a practical interpretation of r = 81 A. There appears to be a positive correlation between SALARY and GMAT. B. we can predict SALARY correctly 81% of the time using GMAT in a straight-line model. C. 81% of the sample variation in SALARY can be explained by using GMAT in a straight-line model. D. We estimate SALARY to increase 81% for every 1-point increase in GMAT.

Explanation / Answer

Option A is Correct. r is 0.81, which means positive and indicate positive correlation

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