Exhibit 17

question 26

Essay

Exhibit 17.9.A bank manager is interested in assigning a rating to the holders of credit cards issued by her bank.The rating is based on the probability of defaulting on credit cards and is as follows. To estimate this probability,she decided to use the logistic model: ,
where,
y = a binary response variable with value 1 corresponding to a default,and 0 to a no default,
x₁ = the ratio of the credit card balance to the credit card limit (in percent),
x₂ = the ratio of the total debt to the annual income (in percent).
Using Minitab on the sample data,she arrived at the following estimates: Note: The p-values of the corresponding tests are shown in parentheses below the estimated coefficients.
Refer to Exhibits 17.9.If only applicants with excellent and good ratings are qualified for a loan,find a linear relation between their balance ratio and their debt ratio that must be satisfied to be qualified.

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Definitions:

Labor Conflict

Disputes between employers and employees or between different groups of workers, often regarding working conditions, wages, and union representation.

Radical Left

Political movement that advocates for drastic changes to the social, economic, or political order, often focusing on ideas of socialism, communism, or anarchism.

Fascism

An extreme right-wing ideology that promotes authoritarian nationalism with a focus on dictatorial leadership, the aggressive silencing of any opposition, and strict control over society and the economy.

National Consumers' League

An American organization founded in 1899, focused on promoting better working conditions, fair labor practices, and consumer rights.