Mike Wilde is president of the teachers union for Otsego School District. In preparing for upcoming negotiations, he is investigating the salary structure of classroom teachers in the district. He believes there are three factors that affect a teachers salary: years of experience, a teaching effectiveness rating given by the principal, and whether the teacher has a masters degree. A random sample of 20 teachers resulted in the following data.

Salary ($ thousands), y		Years of Experience, x1		Principal's Rating, x2		Master's Degree,* x3
31.1		8		35		0
33.6		5		43		0
29.3		2		51		1
43.0		15		60		1
38.6		11		73		0
45.0		14		80		1
42.0		9		76		0
36.8		7		54		1
48.6		22		55		1
31.7		3		90		1
25.7		1		30		0
30.6		5		44		0
51.8		23		84		1
46.7		17		76		0
38.4		12		68		1
33.6		14		25		0
41.8		8		90		1
30.7		4		62		0
32.8		2		80		1
42.8		8		72		0

1. Develop a correlation matrix. Which independent variable has the strongest correlation with the dependent variable? Does it appear there will be any problems with multicollinearity? (Round your answers to 3 decimal places.
2. Determine the regression equation. What salary would you estimate for a teacher with 5 years experience, a rating by the principal of 60, and no masters degree? (Negative amount should be indicated by a minus sign. Round salary to nearest whole number, all other answers to 3 decimal places.) The regression equation is:

   =	19.915	+	0.899	x1 +	0.154	x2 +	(0.667)	x3
   =	33.647	or	$33,647

3. Conduct a global test of hypothesis to determine whether any of the regression coefficients differ from zero. Use the 0.05 significance level. (Round your answers to 2 decimal places.)

   H0 is rejected if F >			. Computed F =
   H0 is	rejected	. At least one regression coefficient is not zero.

4. Conduct a test of hypothesis for the individual regression coefficients. Would you consider deleting any of the independent variables? Use the 0.05 significance level. (Negative amounts should be indicated by a minus sign. Round your answers to 3 decimal places.)

   A regression coefficient is dropped if computed t is to the left of ________ or right of ______________.Keep "years" and "ratings"; drop "master's."

5. If your conclusion in part (d) was to delete one or more independent variables, run the analysis again without those variables. (Round your answers to 4 decimal places. Dropping "rating," we have: Salary = _______+_______(_____) +______(_____).