what variables are used for a regression model. in regards to finding out the outcome of...

what variables are used for a regression model. in regards to finding out the outcome of a loan application at a financial institution.

Expert Solution

The following variables are usedd in a regression model to find the outcome of the loan application at a financial institution, regression model is comprised of explained and unexplained variables ( error term)

Explained variables

Interest rate- because of refinancing and variability of interest rate due to macroeconomics factors
Income- Income stream to reflect paying capacity
Asset- in case if the person defaults
tenure- how long the payback period will be

Unexplained variables

jeff jeffy answered 2 years ago

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