How Should the Loan Officer Interpret the Coefficient on X₂

Multiple Choice

How should the loan officer interpret the coefficient on x₂?

A) For an additional 1.3 percent increase in the interest rate,we would expect the total dollar value of residential loans to decrease by $1.0 million,assuming that all the other independent variables in the model are held constant.
B) For an additional percent increase in the interest rate,we would expect the total dollar value of residential loans to decrease by $1.3 million on average,assuming that all the other independent variables in the model are held constant.
C) For an additional million dollars in loans,we would expect the interest rate to decrease by 1.3 percent,assuming that all the other independent variables in the model are held constant.
D) For an additional $1.3 million in loans,we would expect the interest rate to decrease by 1.0 percent on average,assuming that all the other independent variables in the model are held constant.