When a business makes a loan application to a bank or financial organization, the lender needs to assess the creditability of the borrowers. Let y = 0 denote a borrower with a bad record, while y = 1 represents a credited borrower. Three features of borrower are represented by X1, X2 and X3 in Table 4.18. Use logistic regression to build a prediction model to test a given customer with a credit record (X1, X2, X3) = (–25, 2.5, 0.5).  

Transcribed Image Text:

Table 4.18 Sampling data of a bank credit report on borrowers. X1 X2 X3 Y X1 X2 X3 Y -48.2 6.8 1.6 0 43.0 16.4 1.3 1 -49.2 -17.2 0.3 0 47.0 16.0 1.9 1 -19.2 -36.7 0.8 0 -3.3 4.0 2.7 1 -18.1 -6.5 0.9 0 35.0 20.8 1.9 1 -98.0 -20.8 1.7 0 46.7 12.6 0.9 1 -129.0 -14.2 1.3 0 20.8 12.5 2.4 1 -4.0 -15.8 2.1 0 33.0 23.6 1.5 1 -8.7 -36.3 2.8 0 26.1 10.4 2.1 1 -59.2 -12.8 2.1 0 68.6 13.8 1.6 1 -13.1 -17.6 0.9 0 37.3 33.4 3.5 1 -38.0 1.6 1.2 0 59.0 23.1 5.5 1 -57.9 0.7 0.8 0 49.6 23.8 1.9 1 -8.8 -9.1 0.9 0 12.5 7.0 1.8 1 -64.7 -4.0 0.1 0 37.3 34.1 1.5 1 -11.4 4.8 0.9 0 35.3 4.2 0.9 1 Table 4.18 Sampling data of a bank credit report on borrowers. X1 X2 X3 Y X1 X2 X3 Y -48.2 6.8 1.6 0 43.0 16.4 1.3 1 -49.2 -17.2 0.3 0 47.0 16.0 1.9 1 -19.2 -36.7 0.8 0 -3.3 4.0 2.7 1 -18.1 -6.5 0.9 0 35.0 20.8 1.9 1 -98.0 -20.8 1.7 0 46.7 12.6 0.9 1 -129.0 -14.2 1.3 0 20.8 12.5 2.4 1 -4.0 -15.8 2.1 0 33.0 23.6 1.5 1 -8.7 -36.3 2.8 0 26.1 10.4 2.1 1 -59.2 -12.8 2.1 0 68.6 13.8 1.6 1 -13.1 -17.6 0.9 0 37.3 33.4 3.5 1 -38.0 1.6 1.2 0 59.0 23.1 5.5 1 -57.9 0.7 0.8 0 49.6 23.8 1.9 1 -8.8 -9.1 0.9 0 12.5 7.0 1.8 1 -64.7 -4.0 0.1 0 37.3 34.1 1.5 1 -11.4 4.8 0.9 0 35.3 4.2 0.9 1

Answer rating: 100% (QA)

Here Y denotes the borrower and x1 x2 x3 denotes the features ... View the full answer