Reyem Affiar Assignment Questions and Memo Instructions 1. Using the file CONDO.

xls (available on the homepage), identify a group of look-alike condominiums (i.e., a group of condominiums that have characteristics similar to 236 Ellery Street. You decide what similar means.). Using only this group of condominiums, a. What is your best guess for the selling price of 236 Ellery Street? b. What is the lowest selling price you can imagine? Identify two other groups of look-alike condominiums and repeat (a) and (b). Be prepared to discuss the pros and cons of using each of the three groups. (Form sets of comparable condos using Excel filters by using <Data><Filter> or <Data><Sort> or something similar. Get a mean selling price from the set and also compute the standard deviation.) 2. Using regression analysis and all or subsets of the data, find the best-fitting model for Affiars purposes and use it to calculate a best guess price for Affiar. Form a confidence interval around your best guess to provide a 95% level of confidence, or better. You can use dummy variables to designate years and areas. 3. Try to determine the direct and indirect effect of number of bedrooms. Should number of bedrooms be included or excluded from the best model? Is Affiar better off using all or just a portion of the data provided? (Use a subset of the data by filtering out the high and low end condos using last price. Look at the condos between $125,000 and $225,000. Regress selling price on bedrooms and interior; regress interior on bedrooms. The first regression gives the direct effect of bedrooms on selling price; the second gives the effect of bedrooms on interior. Finally, estimate the total bedroom effect by regressing selling price on bedrooms alone: You should find that the bedroom total effect is: Total effect = (estimated direct effect with interior included) + (estimated indirect effect)*(direct effect of interior) Memo Instructions 1. The memo is a group project, so everyone in your group should agree with the positions stated in the memo. The group should bring TWO complete copies of the memo and any exhibits to class. All assignments must be handed in by the beginning of the class. Bring a copy of the memo and/or detailed notes to class with you so you will be able to discuss the case intelligently in class. 2. Download and read the memo about writing memos provided by the communications specialists. You can download it from the courses web page in the announcements section. 3. You group has been hired by Affiar to forecast a reasonable selling price for his condo choice and suggest a negotiating strategy. Attach any analyses on which you rely on for your forecast.

4. The memo should: a) Be written in proper memo format. Several templates are provided in MS Word. b) List each group members name and show his/her initials. c) Begin with a short introductory paragraph stating the purpose of the memo, and end with a brief concluding paragraph. d) Contain (at least) the following subdivisions: Look-alike analysis (include a justification of your choice of filters), Regression analysis (included variables and their effect), Trade-offs between the two analyses, Forecast and negotiation strategy (your price estimate with explanation of how you got it, and provide a negotiating strategy). e) Be sure that you provide a rationale for the forecasting model and technique you recommend.