For the situation above, give a practical interpretation of $\hat { \beta } _ { 0 } = - 92040$.
A) We estimate SALARY to decrease $\$ 92,040$ for every 1 -point increase in GMAT.
B) The value has no practical interpretation since a GMAT of 0 is nonsensical and outside the range of the sample data.
C) We estimate the base SALARY of graduates of a top business school to be $- \$ 92,040$.
D) We expect to predict SALARY to within $2 ( 92040 ) = \$ 184,080$ of its true value using GMAT in a straight-line model.

Question

Quizplus · Accepted Answer

The value of $\hat { \beta } _ { 0 }$ represents the intercept of a regression line, which in this context would be the estimated salary when the GMAT score is 0. Since a GMAT score of 0 is unrealistic and outside the range of possible scores, this value does not have a practical interpretation in the context of predicting salaries based on GMAT scores.

For the Situation Above, Give a Practical Interpretation Of β^0=−92040\hat { \beta } _ { 0 } = - 92040β^​0​=−92040

For the Situation Above, Give a Practical Interpretation Of $\hat { \beta } _ { 0 } = - 92040$