Question 5 Prediction (8 points) Use testData for this quest…

Questions

Questiоn 5 Predictiоn (8 pоints) Use testDаtа for this question а) (4 points) Using testData, predict the Savings_Rate_Percent with both model1 and model2.i) Show the predictions of both models along with the true values.ii) Calculate the mean squared prediction error (MSPE) of each model. Which model predicts better on the test data? b) (4 points) Consider a new individual who owns their home (Housing_Type = "Own"), has monthly expenses of 4000 USD and a credit score of 700. Using model1:i) Compute the 95% confidence interval for the mean response and the 95% prediction interval for this new individual.ii) Provide an interpretation of each interval in the context of the problem. Why is the prediction interval wider than the confidence interval?

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