Question

Each year U.S. News & World Report conducts its "Survey of America's Best Graduate and Professional Schools." The top 25 business schools in 1991, as determined by reputation, student selectivity, placement success, and graduation rate, are listed in the table. For each school, three variables were measured: (1) GMAT score for the typical incoming student; (2) student acceptance rate (percentage accepted of all students who applied); and (3) starting salary of the typical graduating student.

School	GMAT	Acc.	Rate (%)	Salary ($)
1	Harvard	644	15	63,000
2	Stanford	665	10.2	60,000
3	Penn	644	19.4	55,000
4	Northwestern	640	22.6	54,000
5	MIT	650	21.3	57,000
6	Chicago	632	30	55,269
7	Duke	630	18.2	53,300
8	Dartmouth	649	13.4	52,000
9	Virginia	630	23	55,269
10	Michigan	620	32.4	53.3
11	Columbia	635	37.1	52,000
12	Cornell	648	14.9	50,700
13	CMU	630	31.2	52,050
14	UNC	625	15.4	50,800
15	Cal-Berkeley	634	24.7	50,000
16	UCLA	640	20.7	51,494
17	Texas	612	28.1	43,985
18	Indiana	600	29	44,119
19	NYU	610	35	53,161
20	Puru	595	26.8	43,500
21	USC	610	31.9	49,080
22	Pittsburgh	605	33	43,500
23	Georgetown	617	31.7	45,156
24	Maryland	593	28.1	42,925
25	Rochester	605	35.9	44,499

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 versus GMAT using the 25 data points in the table are shown below.
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b₀ = -92040 b₁ = 228 R² = .66
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For the situation above, give a practical interpretation of the estimated slope.

		We estimate GMAT to increase 228 points for every $1 increase in SALARY.
		We estimate SALARY to increase $228 for every 1-point increase in GMAT.
		The value has no practical interpretation since a GMAT of 228 is nonsensical and outside the range of the sample data.
		We expect to predict SALARY to within 2(228) = $456 of its true value using GMAT in a straight-line model.

Answer 1

slope= 228

y intercept =-92040

Therefore, regression equation is ,

Salary = 228*GMAT -92040

Option B) is correct.

We estimate SALARY to increase $228 for every 1-point increase in GMAT.