Reference no: EM132844664

Given a datasety - Apartment price (thousands of $)X1 - Distance from the sea (ft)X2 - House size (sqr ft) X3 - Number of cafés and convenient stores in a 1 mile radius of the apartment X4 - Binary variable indicating a shopping mall in a 3 mile radius of the apartment {1=yes, 0=no}.

how to find the following?

a. Apply the linear regression model mdl1 over the test set. (This can be done in Excel by creating a formula that utilizes the intercept and coefficients of mdl1, and applies it to each record). What is the MSE for mdl1 over the test set?

b. Similarly, apply the linear regression model, mdl2, over the test set. What is the MSE for mdl2 over the test set?

c. Based on MSE criteria, which of the two models shows better performance over the test set? If your findings are different from those reported in section 1c, how would you explain these differences?

d. Which of the two models would you prefer to apply on new data?