A study of the impact of the salary and stock options paid to executives of 77 Canadian companies on the company rating for corporate social responsibility (CSR) came up with the following
regression equation:

CSR Rating = - 0.163 × Salary + 0.320 × Options + Several Other Factors

All variables are standardized to have a mean of zero and a standard deviation of one. The t-statistic and P-value for the Salary coefficient are -1.196 and 0.235. The t-statistic and P-value for the Options coefficient are -.921 and 0.0046. The F-ratio is 4.811, which is significant at the 99% level.

a) From the information given above, is this regression a good model of how Salary and Options impact CSR Rating?

b) What other factors would be relevant to check in order to determine whether this is a good model?

c) Interpret the t-statistics for the two coefficients given.

d) Interpret the meaning of the negative coefficient for Salary.

e) The board of directors of one company is thinking of increasing executive options by 0.25 standard deviations. What effect can they expect on their CSR rating?