Question
PLEASE provide me a step by step answer so I can understand how to create the binary model involved to resolve the question. Zach has
PLEASE provide me a step by step answer so I can understand how to create the binary model involved to resolve the question.
Zach has collected the data of several Stanley Cup rings sold in the Hockey Memorabilia auctions in the past year and plans to use the data to predict the average selling prices of similar items in the upcoming auction. The data includes final auction selling price, weight, and type of metal (10K Gold, 14K Gold or Sterling Silver), as well as whether each ring had diamonds or not.
a) Help Zach to construct a multiple regression model for this problem. (Hint: Create a set of binary independent variables to represent the metal types, and another independent variable for the diamond). Provide the mathematical equation of the regression model, and then perform the regression analysis in Excel. Please show step by step about how to create the binary model.
| Metal Type | Diamond | Weight (grams) | Price |
| 14K Gold | Yes | 10.7 | 1008 |
| 14K Gold | Yes | 14 | 1505 |
| 14K Gold | No | 9 | 735 |
| Sterling Silver | Yes | 8 | 483 |
| 10K Gold | Yes | 10 | 938 |
| 14K Gold | No | 10.5 | 903 |
| 10K Gold | Yes | 16 | 1085 |
| 10K Gold | No | 15 | 693 |
| 10K Gold | No | 6.5 | 269.5 |
| 10K Gold | No | 5 | 255.5 |
| 10K Gold | Yes | 25 | 1820 |
| Sterling Silver | Yes | 10.4 | 378 |
| Sterling Silver | No | 7.4 | 273 |
| Sterling Silver | No | 5.4 | 206.5 |
| 14K Gold | No | 15.4 | 763 |
| 14K Gold | No | 12.4 | 626.5 |
| Sterling Silver | No | 6 | 294 |
| Sterling Silver | Yes | 9 | 455 |
| Sterling Silver | Yes | 9 | 805 |
| Sterling Silver | No | 12.4 | 346.5 |
| Sterling Silver | No | 7.5 | 255.5 |
| Sterling Silver | Yes | 14 | 763 |
| Sterling Silver | No | 7 | 315 |
| Sterling Silver | No | 9 | 406 |
| Sterling Silver | Yes | 12 | 623 |
| Sterling Silver | No | 5.5 | 210 |
| Sterling Silver | No | 6 | 217 |
| Sterling Silver | Yes | 12 | 833 |
| 10K Gold | No | 5.5 | 154 |
| Sterling Silver | Yes | 14.2 | 763 |
| 10K Gold | Yes | 11 | 693 |
| Sterling Silver | Yes | 16 | 693 |
| 14K Gold | Yes | 13.5 | 1253 |
| 10K Gold | Yes | 11.1 | 693 |
| 10K Gold | Yes | 9.8 | 623 |
| Sterling Silver | Yes | 10 | 525 |
| 14K Gold | Yes | 13 | 1393 |
| Sterling Silver | Yes | 13 | 651 |
| Sterling Silver | Yes | 11.7 | 455 |
| 10K Gold | No | 12.3 | 518 |
| 10K Gold | Yes | 19.5 | 1155 |
| Sterling Silver | Yes | 15.2 | 693 |
| Sterling Silver | Yes | 10 | 304.5 |
| Sterling Silver | Yes | 11 | 658 |
| 10K Gold | Yes | 17.8 | 1323 |
| 10K Gold | No | 11.5 | 525 |
| 10K Gold | No | 12.7 | 416.5 |
| Sterling Silver | No | 8 | 294 |
| 10K Gold | No | 7.5 | 161 |
| Sterling Silver | No | 9 | 367.5 |
| 14K Gold | No | 14 | 693 |
| 14K Gold | No | 12.4 | 623 |
| 10K Gold | Yes | 8.8 | 455 |
| Sterling Silver | No | 8.5 | 381.5 |
| Sterling Silver | No | 6 | 171.5 |
| Sterling Silver | Yes | 11 | 364 |
| Sterling Silver | No | 11.1 | 437.5 |
| Sterling Silver | No | 14.5 | 623 |
| Sterling Silver | No | 5 | 150.5 |
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