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

question 98

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 0 if the customer has owned a home before and 1 if this is their first home. Interpret the confusion matrix.

• A) The misclassification rate for defaulters is .08 and the misclassification for non-defaulters is .1290.
• B) The misclassification rate for defaulters is .08 and the misclassification for non-defaulters is .1482.
• C) The misclassification rate for defaulters is .1290 and the misclassification for non-defaulters is .1111.
• D) The misclassification rate for defaulters is .1482 and the misclassification for non-defaulters is .0870.

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Definitions:

Subsidiary Ledger

A subsidiary ledger is a detailed ledger that contains account-specific information, supporting and connected to the general ledger for a comprehensive accounting system.

Sales Journal

A dedicated journal used to record a company's sales transactions, tracking the selling of goods and services.

Sales Revenue

The total amount of money generated from the sale of goods or services before any expenses are subtracted.

Credits

Accounting entries that increase liabilities or decrease assets, typically signaling the source of financing or revenue.