Question: WEEK8HWGSB420 Let's consinder a mortgage application using HMDA (The Home Mortgage Disclosure Act). Here is a sample from 30 mortgage applications (excel file is available
WEEK8HWGSB420
Let's consinder a mortgage application using HMDA (The Home Mortgage Disclosure Act). Here is a sample from 30 mortgage applications (excel file is available in D2L) :
ID
loanamt
income
hprice
1
109
63
155
2
185
137
264
3
121
53
128
4
125
78
125
5
119
37
149
6
153
65
171
7
380
188
484
8
100
58
125
9
110
78
158
10
41
31
116.5
11
115
54
128
12
248
117
280
13
126
60
157.5
14
260
192
325
15
90
40
145
16
50
36
230
17
125
45
125
18
125
55
145
19
158
62
175
20
130
29
209
21
204
77
260
22
30
28
150
23
114
60
143
24
188
91
253
25
187
85
285
26
84
44
105
27
450
265
650
28
108
49
120
29
100
53
125
30
53
24
66
loanamt = Amount of Mortgage Loan Application (in $1000)
income = Applicant's Annual Income (in $1000)
hprice = House Price to buy (in $1000)
Regression Analyis
Let's consider the following regression model. Estimate the model using Minitab and answer the questions using the output.
Loanamti = b0 + b1 * incomei + et
Write the equations for the following statistics, find or calculate them from the Minitab output, and explain the meanings of the statistics (2 points each)
1) Estimated intercept
2) Estimated slope coefficient
3) SST (Total Sum of Square), SSR (Regression Sum of Square), and SSE (Error Sum of Square)
4) r2 and r, t test for the correlation coefficient
5) Standard Error of b
6) t test for the coefficient of income (Ho: B1= 0 )
7) F statistics and perform the test for the model
8) Variance of et
9) According to the model what are the predicted loan amount if applicants have annual income of $50,000, $100,000, and $200,000 and their confidence intervals?
10) List and explain the assumptions you made for a simple regression model
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts