Question: 1. Using the following table, which k should be used in the subsequent calculations? k % Misclassification 1 10.66666865 2 10.33333194 3 9.33333289 4 9.33333248
1. Using the following table, which k should be used in the subsequent calculations?
| k | % Misclassification |
| 1 | 10.66666865 |
| 2 | 10.33333194 |
| 3 | 9.33333289 |
| 4 | 9.33333248 |
| 5 | 9.60 |
| 6 | 11.66666735 |
| 7 | 11.33333138 |
| 8 | 8.10 |
| 9 | 8.33333361 |
| 10 | 8.66666481 |
Multiple Choice
A.5
B. 8
C. 6
D. None of the percentages should be used.
2. A new applicant, age 45, is applying for a loan. Using the table below, what is the estimated probability the loan will be approved? k = 4.
| Record | Age | Marital | Loan | Risk | Default | ||
| 1 | 34 | Other | $ | 5,100.00 |
| Medium | Yes |
| 2 | 24 | Single | $ | 20,000.00 |
| High | Yes |
| 3 | 49 | Married | $ | 3,000.00 |
| High | No |
| 4 | 32 | Single | $ | 13,000.00 |
| Low | No |
| 5 | 44 | Married | $ | 10,000.00 |
| Low | Yes |
| 6 | 53 |
| $ | 9,000.00 |
|
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Multiple Choice
A. The probable default rate is 25% the loan will be declined.
B. The probable default rate is 75%, the loan will be declined.
C. The probable success rate is 75%, the loan will be approved.
D. The probable success rate is 30%, the loan will be approved.
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