Question 6 Two analysts at a bank want to determine an appropriate credit limit for new customers with a given credit score using existing data on credit limit decisions. The first analyst studies customers with 'good' credit, and the second studies customers with 'excellent' credit. For the purpose of this exercise, suppose these are the only two categories. Suppose 'Good' credit is scored between 0-400 and 'Excellent credit 400-800. The analysts separately report the following fitted equations: Good : 1000+ 0.5scorei. Excellent': i 1500 + 0.7score;. a) Explain how you could combine the information from both of these univariate regressions by running a single (multivariate) linear regression. Deduce from the information provided what the parameter estimates would be in your multivariate regression and provide a derivation based on the OLS minimization problem. b) What is the estimated size of the 'jump'? (The 'jump' does not occur at 0). What is the estimated 'kink'? c) Explain how to test the null hypothesis that the intercept and slope for the two credit categories are equal versus the alternative that they differ. What information would you need? Question 6 Two analysts at a bank want to determine an appropriate credit limit for new customers with a given credit score using existing data on credit limit decisions. The first analyst studies customers with 'good' credit, and the second studies customers with 'excellent' credit. For the purpose of this exercise, suppose these are the only two categories. Suppose 'Good' credit is scored between 0-400 and 'Excellent credit 400-800. The analysts separately report the following fitted equations: Good : 1000+ 0.5scorei. Excellent': i 1500 + 0.7score;. a) Explain how you could combine the information from both of these univariate regressions by running a single (multivariate) linear regression. Deduce from the information provided what the parameter estimates would be in your multivariate regression and provide a derivation based on the OLS minimization problem. b) What is the estimated size of the 'jump'? (The 'jump' does not occur at 0). What is the estimated 'kink'? c) Explain how to test the null hypothesis that the intercept and slope for the two credit categories are equal versus the alternative that they differ. What information would you need