Sales of Toyota Corolla Cars. The file Toyota Corolla. csv contains data on used cars (Toyota Corollas) on sale during late summer of 2004 in the Netherlands. It has 1436 records containing details on 38 attributes, including Price, Age, Kilometers, HP, and other specifications. The goal will be to predict the price of a used Toyota Corolla based on its specifications. a. Identify the categorical variables.
b. Explain the relationship between a categorical variable and the series of binary dummy variables derived from it.
c. How many dummy binary variables are required to capture the information in a categorical variable with N categories?
d. Use R to convert the categorical variables in this dataset into dummy variables, and explain in words, for one record, the values in the derived binary dummies.
e. Use R to produce a correlation matrix and matrix plot. Comment on the relation- ships among variables.