QUESTION:

A) Write all the hypotheses regarding a regression model.

HYP: y= Bo+B1X1+B2X2+B3X3----------+BiXi HYP: Alpha is equal to 0 (Line is passing through origin) HYP: Beta is equal to 0 (line is Parallel to X-axis)

B) 1. Multiple Regression Model:

Ln CEO Salary=5.839+0.001 1990s Compensation + 0.00 Age in years 0.002 years with company + 0.001 years as CEO + 9.186*10E-6 1990 Firms Sales in Milion CEO Salary = e (5.839+0.001 1990s Compensation + 0.00 Age in years 0.002 years with company + 0.001 years as CEO + 9.186*10E-6 1990 Firms Sales in Milion)

2. Rationing:
Following variables are selected on the basis of their values of Tolerance and VIF. 1. 1990s Compensation has 0.822 tolerances which shows it is a strong predictor and there is almost no multicolinerity in this variable. Logically it is important factor because compensation is a part of salary. 2. Age in years has 0.720 tolerances which makes it a strong predictor and almost no multicolinerity exist among it. Logically Age is an important factor because as long as you are working as many raises you would have received. 3. Years With Company has 0.735 tolerances which makes it a strong predictor and has almost no multicolinerity in among the variable. Logically it is an important factor that how loyal you have been with the company by working in with that company. 4. Years as CEO with company have 0.8135 which makes it a strong predictor. 5. 1990s Firm Sales has 0.815 tolerances which makes it a strong predictor and logically it is an important variable that as much profit or sales company will made as much company will provide it to the employees.

3. Relationship of Predictors with Predict ant:

Following are the relationship, 1. 1990s Compensation has a positive relationship and it shows that if Compensation will increase by 100% the salary will increase by 85.1%. 2. Age in Years has a negative relationship and it shows that if age increase by 1 year the salary will decrease by 0.1% have almost no impact. 3. Age in company has negative relationship and it shows that if age with company increase one year it will bring 4.8% decrease in Salary. 4. Years with CEO as company has positive relationship and shows that if you remain CEO of company it will bring 1.5% increase in CEO Salary. 5. 1990s Firm Sales has positive relationship and it shows that if sales of firm in million increases by one million it will increase the salary by 9.2%.

4. GLM Model:
CEO Salary= 5.886-0.002comten+0.001ceoten+1.047*10E-5sales+0.001salary-3.331*10E5Profits-0.228female All variables are selected due to their Partial ETA Squared value. 1. Comenten has negative relation. 2. CEOten has positive relation 3. Sales has positive relation 4. Salaries had positive relation 5. Profits has negative relation 6. Gender female has negative relation. 1. 1990s Firm sales in million

C) Use the F-statistic to test the validity of the model at a 5% significance level.

ANOVAb Model 1 Regression Residual Total Sum of Squares 51.360 13.286 64.646 df 5 171 176 Mean Square 10.272 .078 F 132.206 Sig. .000a

a. Predictors: (Constant), 1990 firm sales, millions, years as ceo with company, years with company, 1990 compensation, $1000s, age in years b. Dependent Variable: log(salary)

Since Sig value is less than 0.05 therefore Model is accepted.

D)

1.MLR Model:
Model Summaryb Adjusted R Std. Error of the Estimate .788 .278741428

Model 1

R .891a

R Square .794

Square

The Final Model is explaining 78.8% of total Data.

D)GLM Model:

Type III Sum of Source Corrected Model Intercept comten ceoten sales salary profits gender Error Total Corrected Total Squares 52.347a 810.875 .116 .010 .253 34.126 .011 .983 12.299 7734.743 64.646 df 6 1 1 1 1 1 1 1 170 177 176 Mean Square 8.725 810.875 .116 .010 .253 34.126 .011 .983 .072 F 120.595 11208.284 1.605 .137 3.493 471.701 .154 13.585 Sig. .000 .000 .207 .712 .063 .000 .695 .000

Partial Eta Squared .810 .985 .009 .001 .020 .735 .001 .074

The GLM Model is explaining almost 81% of the total Data.

E) Which variable significantly predict the salary? 1. MLR Model:

A/c to MLR Model, 1. 1990s Compensation $1000 defines the Salary more significantly having highest Tolerance value that is 0.822.

2. GLM Model:
A/c to GLM Model, Salary is the more significant having the highest Partial ETA Squared value that is 0.735.