# Question

An automobile financing company uses a rather complex credit rating system for car loans. The questionnaire requires substantial time to fill out, taking sales staff time and risking alienating the customer. The company decides to see whether three variables (age, monthly family income, and debt payments as a fraction of income) will reproduce the credit score reasonably accurately. Data were obtained on a sample (with no evident biases) of 500 applications. The complicated rating score was calculated and served as the dependent variable in a multiple regression. Some results from JMP are shown.

a. How much of the variation in ratings is accounted for by the three predictors?

b. Use this number to verify the computation of the overall F statistic.

c. Does the F test clearly show that the three independent variables have predictive value for the rating score?

QUESTION CONTINUE TO NEXT PAGE………

a. How much of the variation in ratings is accounted for by the three predictors?

b. Use this number to verify the computation of the overall F statistic.

c. Does the F test clearly show that the three independent variables have predictive value for the rating score?

QUESTION CONTINUE TO NEXT PAGE………

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