You have decided to start up a company providing advisory services related to the property market. Your company will provide your clients with the fair value of properties that are currently on the market. The fair value will be determined by your companys proprietary statistical approach.

The possible determinants of property prices that you consider for your pricing model are size (in square feet), height (in storey), age (in years), freehold versus leasehold, whether the property is within 1 kilometer to top schools or not, and whether the property is within the central area or not.

(Note: Freehold refers to a perpetual lease on a property. Leasehold refers to a property lease that expires after a certain number of years.)

A. Implement an appropriate statistical method to uncover the fair price of the property.

B. Describe how you would evaluate whether your statistical model fits the data well.

C. Using your statistical approach, how would you determine which property is the most undervalued?

D. Explain how your method works, what are the potential issues with your approach, and how your client should interpret the results of your fair value estimates