The file P10_67.xlsx contains hypothetical starting salaries for MBA students directly after graduation. The file also lists their years of experience prior to the MBA program and their class rank in the MBA program (on a 0–100 scale).
a. Estimate the regression equation with Salary as the dependent variable and Experience and Class Rank as the explanatory variables. What does this equation imply? What does the standard error of estimate se tell you? What about R2?
b. Repeat part a, but now include the interaction term Experience*Class Rank (the product) in the equation as well as Experience and Class Rank individually.
Answer the same questions as in part a. What evidence is there that this extra variable (the interaction variable) is worth including? How do you interpret this regression equation? Why might you expect the interaction to be present in real data of this type?