Econometrics- Logit model to predict delinquencies

This file contains data on mortgage delinquencies. The variables are as follows:

• delinquent - 1 if payment late by 90+ days. 0 otherwise.

• arm = 1 if adjustable rate mortgage, 0 if fixed

• ref = 1 if for a refinance. 0 if for purchase

• insur = 1 if borrow has mortgage insurance, 0 otherwise.

• lvr = loan amount to value of property. percent

• rate = initial interest rate

• amount = loan amount in 5100.003 units

• credit = credit score

• term = loan term in years

(a) Estimate a logit model to predict delinquencies in terms of the other variables in the data set. Enter McFadden's R•squared in the box below.

(b) Use the logit model to predict the probability of delinquency for a 15 year $200,000 fixed rate purchase loan with a LVR of 90, and an initial interest rate of 5%. made to a customer with a credit score of 680 and mortgage insurance. Enter the probability in the box below

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