Question: 2. For a regression problem with a dummy variable in the design matrix (such as D in Equation 7.1 of Fox), consider replacing the 0

 2. For a regression problem with a dummy variable in the

2. For a regression problem with a dummy variable in the design matrix (such as D in Equation 7.1 of Fox), consider replacing the 0 and 1 values in the dummy variable with 0.5 and 0.5 respectively. What is the resulting regression equation? Describe how to interpret the parameters of the model. Is this model an acceptable alternative to the usual one for modeling the effects of a binary variable? Is there a reason to prefer one coding to another? (3 points)

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