Banks Often Offer Customers with Low Credit Scores Subprime Loans

question 35

Multiple Choice

Banks often offer customers with low credit scores subprime loans that have higher-than-normal interest rates. What is the bank guilty of if it gives three times as many subprime loans to black Americans than to white Americans even when they have the same credit scores?

• A) individual discrimination
• B) reverse racism
• C) institutional discrimination
• D) microaggressions

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Definitions:

Matched Pairs

A study design where pairs of subjects are matched in terms of key variables before administering treatments.

Interval Data

A type of data which is measured along a scale, in which each point is placed at a specific distance from one another, and has no true zero point.

Normality Requirement

The assumption that the data or residuals in certain statistical models follow a normal distribution.

Parametric Test

A type of statistical test that assumes the underlying data has a specific distribution, often based on parameters like mean and standard deviation.