A Bank Manager Is Interested in Assigning a Rating to the Holders

question 73

Essay

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 of 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 %)
x₂ = the ratio of the total debt to the annual income (in %)
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.
Define the estimated logistic model.

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Definitions:

Myotome

A group of muscles innervated by the motor fibers of a single spinal nerve root, used to assess and diagnose nerve root damage.

Centrally Acting Muscle Relaxants

Drugs that reduce muscle tension and associated pain by acting on the central nervous system rather than directly on the muscles.

Calcium Blood Test

A diagnostic test measuring the level of calcium in the blood, used to assess bone health and parathyroid function.

CK

Creatine Kinase, an enzyme found in the heart, brain, and skeletal muscle, used as a marker of muscle damage or disease.