Problem 1.3

Dataset: credit.csv. The description of the variables is in an excel file named descriptionCreditScoringData.xls.

This data set consists of genuine credit records from a South German bank. The aim would generally be to predict which customers will repay the loan in full and which of them will not. There are 1000 records, and all amounts are in Deutschmarks. Answer the following using suitable approaches whether descriptive/graphical or inferential and using a suitable package e.g. StatTools or R. Justify your answers in the main text including essential graphs and include all workings as an appendix.

a) Wherever possible and meaningful, provide a brief analysis of each variable, including their distribution, outliers, etc.

b) (i) Explore whether there seem to be differences in age, length of the loan, or amount of loan for those who repaid their loans and those who defaulted?

(ii) Confirm the above using appropriate tests.

c) Explore, describe, and confirm using appropriate tests the association of each variable with the credit status.

d) Does the Length of the loan vary with the use of the loan?

e) Determine relationships, if any, between Age, Length of loan and Amount of loan.