Multiple Choice
If the regression results for a linear probability model of mortgage application are given by: Approvedi = 0.6(0.12) + -0.05(0.001) Debt2IncomeRatioi, with standard errors reported in parenthesis. How should we interpret the coefficient on the debt-to-income ratio variable?
A) Increasing your debt to income ratio by 1 decreases your probability of being approved by 0.05.
B) Increasing your debt to income ratio by 1 decreases your probability of being approved by 0.55.
C) The probability of being approved for a mortgage is 0.05.
D) The probability of being approved for a mortgage is 0.6.
Correct Answer:
Verified
Correct Answer:
Verified
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