Question: A few years ago, the manager of a large French resort-hotel in Provence is interested in predicting the hotel vacancy rate in the high season. He has collected data on the vacancy rate, the daily high temperature, and the then current exchange rate (FFr per US$) for a number of days at different points in several seasons. These data are contained in the file French hotel.xlsx.

a) Create a correlation matrix for these data and interpret the entries with respect to what each indicates about the relationship between the variables.

b) Create your best model relating vacancies to explanatory variable(s). Defend your choice.