Below Gives the Data Concerning (1) the Dependent Variable Default

question 79

Multiple Choice

Below gives the data concerning (1) the dependent variable Default which equals 1 if a customer defaults on their loan and 0 if they do not; (2) the independent variable Price of Home, which is the price of the home (in hundred tens) and (3) the independent variable First Purchase which equals 0 if the customer has owned a home before and 1 if this is their first home. Evaluate the significance of each independent variable in the model.

• A) Intercept = −3.4592 significant, price of home = .70935 significant
• B) Intercept = −3.492 not significant, first purchase of home = .70935 not significant
• C) Price of home is significant p-value = .0201, first purchase is significant p-value = .0136
• D) Price of home is significant p-value = .0136, first purchase is significant p-value = .201

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Definitions:

Price Reduction

A decrease in the selling price of a product or service, often to attract more customers or to sell excess inventory.

Trade Discount

A trade discount is a reduced price offered by suppliers to retailers or other professionals in the industry, encouraging bulk purchases or to compensate for distribution services.

Cumulative Quantity Discount

A discount policy where the price reduction is based on the total volume of purchases made over time, encouraging repeated business by rewarding larger orders.

Stated Period

A specific, predefined duration of time mentioned in a document or agreement.