Answer Happy

QUESTION 2 [CLO2, 20 MARKS] A bank manager wants to know whether households who default on bank loan payment has different average income as compared to households who do not default. A study has been conducted based on existing loan borrowers and the results are presented below. Independent Samples Test Household Equal income in variances thousands assumed Equal variances not assumed Levene's Test for Equality of Variances F Sig. t 202.653 1.880 t-test for Equality of Means 95% Confidence Interval of the Difference Sig. Mean Std. Error df tailed) Difference Difference Lower Upper 698 061 5.94162 3.16088-26435 12.14760 1.686 267.520.093 5.94162 3.52466 99797 12.88122 Answer the following questions based on the situation and results as shown above: (a) By merely looking at household income, will the bank manager be able tell whether a loan borrower will default or not? Why do you think so? [5 marks]