Question: The OLS regression of the binary dependent variable, deny, against the payment-to-income ratio, P/I ratio, and black using 2380 observations yields the estimated regression function:

The OLS regression of the binary dependent variable, deny, against the payment-to-income ratio, P/I ratio, and black using 2380 observations yields the estimated regression function: (0.033) (0.091) (0.033)

A. Interpret the regression coefficient of black. And indicate whether or not the coefficient of black is significantly different from zero.

B. If P/I ratio=0.4, compute the estimated probability of being denied a mortgage for black and for white.

C. Are there strong reasons to assume racial discrimination in mortgage decisions? Explain your answer along with the least-square assumption #1.

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2. Ask questions, listen rather than attempt to persuade.

9. How much of the information collected will be used in decision-making?

1. Background knowledge of the subject and