You currently work for Aperture Science, a small company that sells information technology (IT) products. The lone
Question:
You currently work for Aperture Science, a small company that sells information technology (IT) products. The lone data scientist at Aperture approaches you one day and proposes to use k-NN estimation to build a model to predict the IT budget of companies to identify potential new clients. They would like your help building and deploying the model.
The only data you have on hand is a sample of companies across the United States, which includes their IT budget for last year, their total revenue last year, their total number of employees last year, and their industry classification. This data will make up your database of potential neighbors. Ultimately, as a first true test of the model you want to predict the IT budget for Acme Corp., a potential client for whom you do not know their IT budget (but you know their total revenue, number of employees, and industry classification).
A) Given the information above, explain how you could estimate Acme's IT budget using k-NN.
B) If you chose k=N, the total number of training examples, what would be the effect?
Corporate Finance
ISBN: 978-0077861759
10th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe