Calculating Distance with Categorical Predictors. This exercise with a tiny dataset illustrates the calculation of Euclidean distance and the creation of binary dummies. (Note that creating dummies is not required in certain software such as J MP, but it is useful to understand how they are derived and used). The online education company Statistics.com segments its customers and prospects into three main categories: IT professionals (IT), statisticians (Stat), and other (Other). It also tracks, for each customer, the number of years since first contact (years). Consider the following customers; information about Whether they have taken a course or not (the outcome to be predicted) is included: Customer 1: Stat, 1 year, did not take course Customer 2: Other, 1.1 year, took course a. Consider now the following new prospect: Prospect 1: IT, 1 year Using the information given above on the two customers and one prospect, create one dataset for all three with the categorical predictor variable transformed into 2 dummy variables, and a similar dataset with the categorical predictor variable transfonned into 3 dummy variables