SCENARIO 14-18
a Logistic Regression Model Was Estimated in Order

question 322

Short Answer

SCENARIO 14-18
A logistic regression model was estimated in order to predict the probability that a randomly chosen
university or college would be a private university using information on mean total Scholastic
Aptitude Test score (SAT) at the university or college and whether the TOEFL criterion is at least 90
(Toefl90 = 1 if yes, 0 otherwise.) The dependent variable, Y, is school type (Type = 1 if private and
0 otherwise).
The PHStat output is given below:
Binary Logistic Regression $$\begin{array}{l}\begin{array} { l r r r r } \hline { \text { Predictor } } & \text { Coefficients } & \text { SE Coef } & { Z } & p \text {-Value } \\\hline \text { Intercept } & - 3.9594 & 1.6741 & - 2.3650 & 0.0180 \\\text { SAT } & 0.0028 & 0.0011 & 2.5459 & 0.0109 \\\text { Toefl90:1 } & 0.1928 & 0.5827 & 0.3309 & 0.7407\end{array}\\\\\begin{array} { l l } \text { Deviance } & 101.9826\end{array}\end{array}$$
-Referring to Scenario 14-18, what is the estimated probability that a school with a mean SAT
score of 1250 and a TOEFL criterion that is at least 90?

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Definitions:

Five-Year Period

A span or timeframe that extends for five consecutive years.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows or the rate used by financial institutions for interbank lending and borrowing.

Present Value

The value today of a sum of money or future cash flows, taking into account a specific rate of return.

Future Cash Flow

The projected movement of money into and out of a business or investment over future periods.