Problem Set #7 - Solution
1.
(a) For a black applicant having a P/I ratio of 0.35, the probability that the
application will be denied is (-2.26 + 2.74 X 0.35 + 0.71) = (-0.59) =
27.76%.
(b) With the P/I ratio reduced to 0.30, the probability of being den
Solution Problem Set #6
1. (a)According to the regression results in column (1), the house price is expected to
increase by 21% (= 100% X 0.00042 X 500 ) with an additional 500 square feet
and other factors held constant. The 95% confidence interval for t
Problem set #6 (due April 16)
1. Exercise 8.2
2. Exercise 8.4
3. Exercise 8.6
4. Friedman and Meiselman estimated an equation representing a simple form of the
quantity theory of money:
Ct = 1 + 2 Mt + ut
(1)
where Mt =stock of money at time t; and
Ct = c