James Silva is a management accountant at Keebler$-$Olson, where he is in charge of their investment portfolio. James worked with a data scientist to develop a model that predicts how a given loan will perform in the future based on the characteristics of the borrower available on the peer$-$to$-$peer lending platform Mandel Credit. James Silva and the data scientist on his team work together to develop the following decision tree:

$($Click the icon to view the decision tree.$)$

The data science team tests the model on the following validation set:

$($Click the icon to view the validation set.$)$

Read the

Requirement $1.$ Identify the rules for this full decision tree.

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Requirement $2.$ Classify each loan in the validation sample as repay or default. Calculate the proportion of loans correctly classified.

Start by classifying each loan in the validation sample as $(0)$ Repay or $(1)$ Default.

Observation

Income

Credit Score

Actual Outcome

Model Prediction

$($Full Tree$)$