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

question 49

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 tens) and (3) the independent variable First Purchase which equals 1 if the customer has owned a home before and 0 if this is their first home. Estimate the probability that a buyer who spent $435,000 on their first home purchase will default.

• A) .99636
• B) .9899
• C) .9768
• D) .9695

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Definitions:

Total Assets

The sum of all assets owned by a company, including both current and non-current assets, as represented on the balance sheet.

Appropriation

The process of setting aside funds for a specific use or purpose by a company, organization, or government.

Corporation's Affairs

The various activities, decisions, and policies related to the management and operation of a corporation.

Stockholders' Equity

The remaining interest in a company's assets after all liabilities have been subtracted, symbolizing ownership stake.