Exhibit 17

question 44

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.Assuming the debt ratio is 30%,what is the range of values for the balance ratio that yields the fair rating?

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Definitions:

Dialogue

A conversation or exchange of ideas between two or more individuals.

Defensiveness

A psychological reaction characterized by an individual's attempt to protect their self-esteem or justify their actions when feeling threatened or criticized.

Inquiry

The act of seeking information by questioning or investigating to gain deep understanding.

Communication Relationship

The dynamic of interaction and exchange of information between individuals or entities.