# a3 - Weihan Ni A20252394 MBA 507 Decision making Assignment...

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Weihan Ni A20252394 MBA 507 Decision making Assignment 3 8.2 a) Mileage b) Price c) Price decreases by \$151 as each 10000 miles the mileage increases. d) The average price of used car with 0 mileage is 24356.15 by this model. e) = 24356.15 – 100000*0.0151 = \$ 22846.15 f) e = Price - = 24000 – 22846.15 = 1153.85 8.6 = 23847 – 923*(-0.169) =23847+155.987= 24002.987 8.8 This model makes no sense. The independent variable, Job Type, is not quantitative, because it has no unit. 8.18 a) \$/sq ft. b) R 2 =0.79 2 =0.6241 c) Δprice= r*Δarea=0.79*2SD=1.58SD, so the is 1.58 standard deviation higher than the mean. 8.22 a) The model is not appropriate. The relationship is not linear. b) The model is not appropriate. The spread is decreasing. c) The model is appropriate. The residual plot looks good. 8.26 There is one policy worth too much, \$996953.24.This makes the R 2 much bigger than it should be. The actuary should rule this out and rebuild the model. 8.46 a)

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## This note was uploaded on 11/07/2011 for the course ECON 101 taught by Professor Johnson during the Spring '11 term at Sciences Po.

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a3 - Weihan Ni A20252394 MBA 507 Decision making Assignment...

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