Causal method: Example 2 You are hired as a business analyst in a real estate company. You have to predict future sales volumes as function of the APR. You perform a linear regression and find the chart presented on the next slide. a) You expect the APR to be 4.32% next year. How many houses will be sold? b) How do you interpret the R2 value? How does it affect your prediction? Causal method: Example 2 Houses sold per year [units] 580 560 540 520 500 -480 460 440 420 400 House sales as function of APR y=-151.82x + 1,149.14 R = 0.65 3.8 3.9 4.1 4.2 4.3 4.4 4.5 Annual Percentage Rate (APR) [%]