Exhibit 17

question 38

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 Exhibit 17.9.What is the estimated logistic model?

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Definitions:

Diagnostic Classifications

Systems used in healthcare and psychology to categorize and diagnose diseases, disorders, and other conditions.

Intersystem Problems

Challenges that arise between overlapping or interconnected systems, requiring multidisciplinary solutions.

Conceptual Model

A theoretical framework that represents how ideas or concepts are related within a study or research topic.

Paradigm

A distinct set of concepts, thought patterns, or an accepted way of thinking within a particular field or discipline.