Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A bank uses the following logistic regression to evaluate the probability that an existing customer will apply for a new credit card in the next

A bank uses the following logistic regression to evaluate the probability that an existing customer will apply for a new credit card in the next 6 months. This probability is denoted by NewCreditPr. The BankingDummy is 1 if a customer has other banking accounts and 0 otherwise. Balance is the total balance in a customer's credit card account. NumCredAccounts is the number of credit card accounts a customer already has and Age is the customer's age. All the coefficients are significant. log(NewCreditPr/(1-NewCreditPr)) = -4 + 0.2BankingDummy - 0.01Age + 0.0002Balance - 0.1NumCredAccounts + 0.0003Balance NumCredAccounts What is the predicted new credit probability if a customer's total balance is $5,000, has 2 different credit accounts, another banking account, and her age is 55? A. 2.8% B. 5.7% C. 6.1% D. 6.5%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac

10th Edition

B010IKDQZM

More Books

Students also viewed these Accounting questions