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You have been hired by RRB Bank which is interested in the factors leading to customers being at risk of defaulting on their credit cards.
You have been hired by RRB Bank which is interested in the factors leading to customers being at risk of defaulting on their credit cards. The associated spreadsheet contains information on three variables:
- Gender
- Risk Rating - Internal assessment comparing monthly credit spending to credit level. 0 - 4 with 0 as the lowest risk rating.
- Average Monthly Balance - that is the amount not paid off at the end of the month.
- Many banks, including the Grameen Bank, consider that females are better at managing budgets. In order to determine if this is true RRB has asked you to conduct a test at the 5% level of significance to see if the average monthly balance of female clients is less than that of male clients. (6 Marks)
- RRB is also concerned that there may be gender bias in lending practices and decide to look at the risk rating factor they have assigned on their clients. Conduct a test at the 5% level of significance to determine if there is a difference in the proportion of female and male clients who have a risk rating of 0. (Hint: Count the number of females with a rating of 0 and the number of males who have a rating of 0 and convert these to proportion) (5 Marks)
| Client | Gender | Risk Rating | Average Monthly balance |
| 1 | M | 0 | 2517 |
| 2 | M | 0 | 1833 |
| 3 | F | 1 | 1418 |
| 4 | F | 1 | 1873 |
| 5 | M | 3 | 890 |
| 6 | M | 0 | 1049 |
| 7 | F | 0 | 1034 |
| 8 | M | 0 | 0 |
| 9 | F | 0 | 1179 |
| 10 | M | 0 | 629 |
| 11 | M | 0 | 0 |
| 12 | M | 0 | 2517 |
| 13 | F | 0 | 644 |
| 14 | M | 0 | 1634 |
| 15 | M | 1 | 1389 |
| 16 | F | 0 | 1992 |
| 17 | M | 3 | 0 |
| 18 | F | 3 | 0 |
| 19 | F | 0 | 2324 |
| 20 | M | 0 | 1276 |
| 21 | F | 0 | 2485 |
| 22 | F | 3 | 0 |
| 23 | M | 1 | 1118 |
| 24 | M | 0 | 0 |
| 25 | M | 0 | 1182 |
| 26 | M | 3 | 883 |
| 27 | F | 3 | 0 |
| 28 | F | 1 | 1260 |
| 29 | F | 1 | 1557 |
| 30 | M | 0 | 2061 |
| 31 | M | 0 | 1561 |
| 32 | M | 0 | 910 |
| 33 | F | 0 | 2215 |
| 34 | F | 0 | 0 |
| 35 | M | 1 | 0 |
| 36 | M | 0 | 1155 |
| 37 | F | 0 | 1576 |
| 38 | M | 2 | 1710 |
| 39 | F | 0 | 2145 |
| 40 | M | 0 | 1547 |
| 41 | M | 0 | 1250 |
| 42 | F | 0 | 1880 |
| 43 | F | 0 | 788 |
| 44 | F | 0 | 605 |
| 45 | M | 2 | 2116 |
| 46 | F | 0 | 1393 |
| 47 | M | 0 | 1381 |
| 48 | F | 0 | 1843 |
| 49 | F | 1 | 1354 |
| 50 | F | 1 | 1144 |
| 51 | F | 0 | 0 |
| 52 | M | 0 | 1236 |
| 53 | M | 0 | 0 |
| 54 | M | 2 | 0 |
| 55 | F | 3 | 0 |
| 56 | M | 3 | 1442 |
| 57 | F | 0 | 885 |
| 58 | M | 0 | 1663 |
| 59 | F | 0 | 0 |
| 60 | F | 3 | 2493 |
| 61 | M | 3 | 1153 |
| 62 | F | 0 | 2517 |
| 63 | M | 1 | 0 |
| 64 | F | 1 | 716 |
| 65 | M | 0 | 1420 |
| 66 | M | 0 | 2289 |
| 67 | F | 1 | 2198 |
| 68 | M | 1 | 2517 |
| 69 | M | 2 | 1359 |
| 70 | F | 1 | 1650 |
| 71 | M | 0 | 861 |
| 72 | M | 0 | 1698 |
| 73 | F | 1 | 1439 |
| 74 | M | 0 | 1960 |
| 75 | M | 2 | 932 |
| 76 | F | 0 | 1521 |
| 77 | F | 2 | 1922 |
| 78 | F | 3 | 988 |
| 79 | M | 0 | 865 |
| 80 | F | 3 | 0 |
| 81 | M | 0 | 0 |
| 82 | M | 3 | 1144 |
| 83 | F | 3 | 0 |
| 84 | F | 1 | 0 |
| 85 | M | 2 | 1267 |
| 86 | F | 0 | 2430 |
| 87 | M | 0 | 2517 |
| 88 | M | 2 | 1880 |
| 89 | M | 0 | 1355 |
| 90 | M | 0 | 1597 |
| 91 | F | 0 | 477 |
| 92 | F | 1 | 1272 |
| 93 | M | 0 | 1788 |
| 94 | M | 0 | 2517 |
| 95 | M | 0 | 0 |
| 96 | M | 1 | 1607 |
| 97 | F | 0 | 2312 |
| 98 | M | 1 | 1573 |
| 99 | F | 3 | 1598 |
| 100 | F | 2 | 1251 |
| 101 | M | 2 | 795 |
| 102 | F | 3 | 890 |
| 103 | M | 3 | 1146 |
| 104 | M | 2 | 2049 |
| 105 | M | 0 | 2001 |
| 106 | M | 0 | 0 |
| 107 | F | 1 | 1465 |
| 108 | M | 0 | 0 |
| 109 | F | 0 | 545 |
| 110 | F | 1 | 0 |
| 111 | F | 0 | 1289 |
| 112 | M | 2 | 1928 |
| 113 | F | 0 | 193 |
| 114 | F | 0 | 0 |
| 115 | M | 0 | 0 |
| 116 | M | 2 | 1172 |
| 117 | M | 0 | 1799 |
| 118 | M | 0 | 2517 |
| 119 | F | 1 | 1777 |
| 120 | F | 0 | 0 |
| 121 | F | 1 | 1985 |
| 122 | F | 2 | 2090 |
| 123 | M | 3 | 1584 |
| 124 | M | 0 | 1740 |
| 125 | F | 0 | 2517 |
| 126 | F | 3 | 1656 |
| 127 | F | 3 | 0 |
| 128 | F | 0 | 2391 |
| 129 | F | 2 | 1848 |
| 130 | M | 1 | 0 |
| 131 | M | 1 | 0 |
| 132 | M | 0 | 1880 |
| 133 | M | 1 | 0 |
| 134 | F | 3 | 1489 |
| 135 | M | 0 | 543 |
| 136 | M | 0 | 1656 |
| 137 | F | 3 | 1589 |
| 138 | F | 0 | 2039 |
| 139 | F | 0 | 0 |
| 140 | M | 0 | 1467 |
| 141 | F | 2 | 1903 |
| 142 | M | 0 | 890 |
| 143 | F | 3 | 0 |
| 144 | M | 0 | 2008 |
| 145 | F | 3 | 1647 |
| 146 | M | 0 | 2033 |
| 147 | M | 0 | 0 |
| 148 | M | 0 | 2505 |
| 149 | M | 0 | 1363 |
| 150 | M | 0 | 1551 |
| 151 | F | 1 | 1506 |
| 152 | F | 1 | 2517 |
| 153 | M | 0 | 0 |
| 154 | M | 0 | 1757 |
| 155 | M | 0 | 1435 |
| 156 | M | 0 | 0 |
| 157 | M | 0 | 694 |
| 158 | M | 0 | 1729 |
| 159 | M | 1 | 900 |
| 160 | M | 0 | 0 |
| 161 | F | 0 | 0 |
| 162 | F | 1 | 1267 |
| 163 | M | 3 | 0 |
| 164 | M | 0 | 0 |
| 165 | M | 1 | 2365 |
| 166 | F | 0 | 1499 |
| 167 | M | 0 | 0 |
| 168 | F | 3 | 0 |
| 169 | M | 1 | 1236 |
| 170 | M | 0 | 0 |
| 171 | M | 1 | 2129 |
| 172 | M | 0 | 507 |
| 173 | M | 0 | 636 |
| 174 | F | 3 | 1366 |
| 175 | M | 1 | 1571 |
| 176 | M | 3 | 1030 |
| 177 | M | 2 | 2029 |
| 178 | M | 0 | 0 |
| 179 | M | 2 | 2517 |
| 180 | F | 0 | 1785 |
| 181 | F | 0 | 1924 |
| 182 | M | 1 | 2517 |
| 183 | M | 0 | 0 |
| 184 | M | 0 | 672 |
| 185 | M | 1 | 2514 |
| 186 | M | 0 | 715 |
| 187 | M | 0 | 2517 |
| 188 | F | 3 | 1246 |
| 189 | F | 1 | 1095 |
| 190 | M | 0 | 1961 |
| 191 | F | 3 | 0 |
| 192 | F | 1 | 460 |
| 193 | F | 1 | 1035 |
| 194 | M | 0 | 840 |
| 195 | M | 2 | 1817 |
| 196 | M | 1 | 984 |
| 197 | F | 3 | 524 |
| 198 | F | 0 | 0 |
| 199 | M | 0 | 891 |
| 200 | M | 0 | 0 |
| 201 | M | 0 | 1748 |
| 202 | M | 0 | 1508 |
| 203 | M | 0 | 0 |
| 204 | M | 3 | 0 |
| 205 | M | 1 | 1526 |
| 206 | M | 3 | 1796 |
| 207 | M | 0 | 2183 |
| 208 | F | 3 | 1701 |
| 209 | F | 3 | 2253 |
| 210 | M | 1 | 2084 |
| 211 | M | 0 | 1322 |
| 212 | F | 2 | 0 |
| 213 | M | 1 | 1049 |
| 214 | M | 0 | 2517 |
| 215 | M | 0 | 1696 |
| 216 | F | 0 | 2221 |
| 217 | F | 0 | 1120 |
| 218 | F | 0 | 0 |
| 219 | M | 0 | 1542 |
| 220 | M | 0 | 2252 |
| 221 | F | 3 | 0 |
| 222 | F | 1 | 1928 |
| 223 | F | 1 | 1129 |
| 224 | F | 1 | 0 |
| 225 | M | 0 | 1603 |
| 226 | F | 1 | 1470 |
| 227 | F | 1 | 1422 |
| 228 | M | 0 | 2517 |
| 229 | M | 3 | 778 |
| 230 | M | 0 | 1832 |
| 231 | M | 1 | 1351 |
| 232 | M | 1 | 0 |
| 233 | M | 0 | 0 |
| 234 | M | 1 | 1629 |
| 235 | M | 0 | 1548 |
| 236 | F | 3 | 1604 |
| 237 | M | 0 | 1654 |
| 238 | M | 1 | 1400 |
| 239 | F | 0 | 2023 |
| 240 | F | 3 | 0 |
| 241 | M | 0 | 2517 |
| 242 | M | 1 | 1116 |
| 243 | M | 0 | 789 |
| 244 | M | 0 | 1266 |
| 245 | M | 3 | 0 |
| 246 | M | 1 | 1031 |
| 247 | M | 0 | 0 |
| 248 | M | 0 | 1997 |
| 249 | M | 0 | 2319 |
| 250 | M | 1 | 1211 |
| 251 | F | 0 | 1157 |
| 252 | F | 0 | 2459 |
| 253 | F | 0 | 2049 |
| 254 | F | 0 | 2517 |
| 255 | M | 0 | 1643 |
| 256 | F | 1 | 0 |
| 257 | M | 0 | 1766 |
| 258 | F | 1 | 0 |
| 259 | F | 0 | 2376 |
| 260 | M | 0 | 0 |
| 261 | M | 0 | 836 |
| 262 | F | 1 | 2173 |
| 263 | F | 1 | 1394 |
| 264 | M | 2 | 1542 |
| 265 | F | 1 | 1285 |
| 266 | M | 0 | 0 |
| 267 | M | 0 | 1735 |
| 268 | M | 3 | 2517 |
| 269 | F | 1 | 2077 |
| 270 | M | 3 | 1217 |
| 271 | M | 1 | 651 |
| 272 | F | 1 | 1394 |
| 273 | M | 3 | 1337 |
| 274 | M | 0 | 1816 |
| 275 | F | 2 | 0 |
| 276 | F | 0 | 0 |
| 277 | M | 0 | 2480 |
| 278 | M | 3 | 2309 |
| 279 | F | 0 | 0 |
| 280 | F | 0 | 2145 |
| 281 | F | 0 | 859 |
| 282 | F | 1 | 0 |
| 283 | F | 1 | 1397 |
| 284 | M | 0 | 1254 |
| 285 | M | 0 | 1661 |
| 286 | F | 3 | 2168 |
| 287 | F | 1 | 1152 |
| 288 | M | 0 | 1233 |
| 289 | F | 1 | 1912 |
| 290 | F | 0 | 1665 |
| 291 | M | 0 | 1833 |
| 292 | M | 1 | 0 |
| 293 | M | 0 | 1170 |
| 294 | M | 3 | 0 |
| 295 | M | 0 | 926 |
| 296 | M | 1 | 1687 |
| 297 | F | 0 | 1496 |
| 298 | M | 0 | 1299 |
| 299 | M | 0 | 0 |
| 300 | F | 1 | 2517 |
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Stochastic Calculus And Applications
Authors: Samuel N Cohen, Robert J Elliott
2nd Edition
1493928678, 9781493928675
