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Here i'm going to guide you through a solution process that would be applicable if we had the data using our statistical software for analysis.
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First, we want to load and inspect the data.
00:14
Make sure you check for missing values and understand the structure.
00:18
Then, you want to estimate the linear probability model.
00:23
You can use a linear regression function where the dependent variable is going to be the default indicator and the independent variable are the ltv the fico and the age then you want to predict the probability of a default for our average values you're going to use the coefficients from the lpm to to calculate the predicted probability.
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For b, we have ltv is 70, our fico is 600, and our age is 50.
01:01
So we want to substitute these into our model to find the predicted probability of default.
01:08
Then we want to estimate the logistic regression model.
01:14
You can use your function to estimate the model with the same independent and dependent variables as above...