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The broker's concern is how credit ratings should be used in marketing these loans.

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Question;For 1,2,3, and 4 I need solutions and brief explanations in the manner it would be explained to somebody that does not comprehend statistics.The broker's concern is how credit ratings should be used in marketing these loans. The broker gathered sample data on credit rating & loan delinquencies which are provided for your use. The loans that are delinquent beyond ninety days are likely candidates for foreclosure. The broker believes that the bank is willing to accept a minimum credit score that has an expected foreclosure rate of 10%.1) Use simple regression: What is the relationship between days Delinquent & credit scores?2) To yield an average delinquency of ninety days, what score is expected?3) If the broker uses this score as a minimum for extending loans, what proportion of loans to people with that score would you expect to be ninety or more days delinquent?4) What would minimum credit score would you recommend accepting and why?

 

Paper#61297 | Written in 18-Jul-2015

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