Question
A new applicant, age 45, is applying for a loan. Using the table below, what is the estimated probability the loan will be approved? k
A new applicant, age 45, is applying for a loan. Using the table below, what is the estimated probability the loan will be approved? k = 4.
| Record | Age | Marital | Loan | Risk | Default | ||
| 1 | 34 | Other | $ | 5,100.00 | Medium | Yes | |
| 2 | 24 | Single | $ | 20,000.00 | High | Yes | |
| 3 | 49 | Married | $ | 3,000.00 | High | No | |
| 4 | 32 | Single | $ | 13,000.00 | Low | No | |
| 5 | 44 | Married | $ | 10,000.00 | Low | Yes | |
| 6 | 53 | $ | 9,000.00 | ||||
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Multiple Choice
A. The probable default rate is 25% the loan will be declined.
B. The probable default rate is 75%, the loan will be declined.
C. The probable success rate is 75%, the loan will be approved.
D. The probable success rate is 30%, the loan will be approved.
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Understanding financial statements
Authors: Lyn M. Fraser, Aileen Ormiston
9th Edition
136086241, 978-0136086246
