Question

A recent audit report mentions the e?ciency of one of the loan o?cers in your credit card company. A sample of 50 applications for credit cards was randomly selected from among the applications that this o?cer worked on in the last cycle. The data are in credit approval.xlsx, which contains the following variables: • homeowner: a binary variable, Y=yes, N=no • ?co: the applicant's credit score • years: how many years of credit in the applicant's credit history • balance: current balance on all of applicant's current credit cards • decision: the o?cer's decision; Approve means the application was approved, Reject means it was not Write a report that ?rst summarizes the data in the sample, and then conducts a chi-squared test of independence between the variables ?homeowner? and ?decision?. Your report should then summarize what the results of your test imply, and then address the question of whether the loan o?cer basically uses home ownership as the primary determinant of whether to approve a credit application or not. Make sure that you explicitly state what null hypotheses you are testing in your analysis.

homeowner	fico	years	balance	decision
Y	725	20	11320	Approve
Y	573	9	7200	Reject
Y	677	11	20000	Approve
N	625	15	12800	Reject
N	527	12	5700	Reject
Y	795	22	9000	Approve
N	733	7	35200	Approve
N	620	5	22800	Reject
Y	591	17	16500	Reject
Y	660	24	9200	Approve
Y	700	19	22000	Approve
Y	500	16	12500	Reject
Y	565	6	7700	Reject
N	620	3	37400	Reject
Y	774	13	6100	Approve
Y	802	10	10500	Approve
N	640	7	17300	Reject
N	523	14	27000	Reject
Y	811	20	13400	Approve
N	763	2	11200	Reject
N	555	4	2500	Reject
N	617	9	8400	Reject
Y	642	13	16000	Approve
N	688	3	3300	Approve
Y	649	12	7500	Approve
Y	695	15	20300	Approve
Y	701	9	11700	Approve
N	635	7	29100	Reject
N	507	2	2000	Reject
Y	677	12	7600	Approve
N	485	5	1000	Reject
N	582	3	8500	Reject
Y	699	17	12800	Approve
Y	703	22	10000	Approve
N	585	18	31000	Reject
Y	620	8	16200	Reject
Y	695	16	9700	Approve
Y	774	13	6100	Approve
Y	802	10	10500	Approve
N	640	7	17300	Reject
N	536	14	27000	Reject
Y	801	20	13400	Approve
N	760	2	11200	Reject
N	567	4	2200	Reject
N	600	10	12050	Reject
Y	702	11	11700	Approve
Y	636	8	29100	Reject
N	509	3	2000	Reject
N	595	18	29000	Reject
Y	733	15	13000	Approve

Answer 1