Let’s consinder a mortgage application using HMDA (The Home Mortgage Disclosure Act). Here is a sample from 30 mortgage applications. IDloanamtincomehprice11096315521851372643121531284125781255119371496153651717380188484810058125911078158104131116.51111554128122481172801312660157.51426019232515904014516503623017125451251812555145191586217520130292092120477260223028150231146014324188912532518785285268444105274502656502810849120291005312530532466loanamt = Amount of Mortgage Loan Application (in $1000)income = Applicant’s Annual Income (in $1000)hprice = House Price to buy (in $1000)6) t test for the coefficient of income (Ho: B1  = 0 )7) F statistics and perform the test for the model8) Variance of et9) 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

Question
Asked Nov 9, 2019
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Let’s consinder a mortgage application using HMDA (The Home Mortgage Disclosure Act). Here is a sample from 30 mortgage applications.

 

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)

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

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Step 1

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Step 2

6).

The null hypothesis:

The slope coefficient of income is not significant.

Alternative hypothesis:

The slope coefficient of income is not significant.

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H A 0 H A0

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Step 3

Step- by-step procedure to obtain the t test for the coefficient of income using Minitab software as follows:

  • Choose Stat > Regression > Regression.
  • In Response, enter the column containing the res...

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