Use the estimated probit model in Equation (11.8) to answer the following questions:

a. A black mortgage applicant has a P/I ratio of 0.35. What is the proba- bility that his application will be denied?

b. Suppose that the applicant reduced this ratio to 0.30. What effect would this have on his probability of being denied a mortgage?

c. Repeat

(a) and

(b) for a white applicant.

d. Does the marginal effect of the P/I ratio on the probability of mort- gage denial depend on race? Explain.