Question

Subject Name: Data Management for Analytics
Software used: SAS

Choose the best single option.

6. Consider the event frequency table shown below. Which of the following statements are true?

Var x	Freq	Events	Non-Events
Level 1	150	50	100
Level 2	890	600	290
Level 3	450	250	200
Total	1490	900	590

a. The odds of an event occurring at Level 1 is greater than the odds of an event not occurring at Level 1.

b. The odds of an event occurring at Level 2 is greater than the odds of an event not occurring at Level 2.

c. The odds of an event occurring at Level 3 is greater than the odds of an event not occurring at Level 3.

d. The WOE of Level 3 is 0.305.

Answer 1

(a)

False

The odds of an event occurring at Level 1 = Events/Non-Events = 50/100 = 0.5

The odds of an event not occurring at Level 1 = Non-Events/Events = 100/50 = 2.0

So,

The odds of an event occurring at Level 1 = 0.5 is not greater than the odds of an event not occurring at Level 1 = 2.0

(b)

True

The odds of an event occurring at Level 2 = Events/Non-Events = 600/290 = 2.0690

The odds of an event not occurring at Level 2 = Non-Events/Events = 290/600 = 0.4833

So,

The odds of an event occurring at Level 2 = 02.0690 is greater than the odds of an event not occurring at Level 2 = 0.4833

(c)

True

The odds of an event occurring at Level 3 = Events/Non-Events = 250/200 = 1.25

The odds of an event not occurring at Level 3 = Non-Events/Events = 200/250= 0.80

So,

The odds of an event occurring at Level 3 = 1.25 is not greater than the odds of an event not occurring at Level 3 = 0.8

(d)

False

Explanation;

Weight of Evidence (WOE) of Level 3 is given by: