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Quarterly Commission Prediction Model y = 0.04x, + 6.41X2 + 14.34X3 - 1527.47 x1 = base salary X2 = hours on phone this quarter X3

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Quarterly Commission Prediction Model y = 0.04x, + 6.41X2 + 14.34X3 - 1527.47 x1 = base salary X2 = hours on phone this quarter X3 = months experience in workforce After ensuring that all residual plots are homoscedastic, you finally have a model you're happy with. Raquel takes a look and offers up some conclusions. What should you say in response to each? "Salaries are positively correlated with commissions. I should raise everyone's salaries, and in turn they'll all make more sales each quarter." "Nope. Remember, correlation does not imply causation." "Not quite. The model only makes predictions; we can't assume they will be accurate." "You're absolutely right!" "Not necessarily. You're forgetting about a lurking variable-number of clients."

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