After estimating a probit model for whether an individual purchases a particular product as a function of income, which of the following conditions must hold?
A) The r-squared will be one.
B) The intercept will be positive.
C) The predictions will fall between zero and 1.
D) The predictions will sum to zero.

Question

Quizplus · Accepted Answer

The predictions from a probit model must fall between zero and 1, as they represent the probability of the individual purchasing the product. The other options are incorrect: the r-squared will not necessarily be one, the intercept can be positive or negative depending on the data, and the predictions do not need to sum to zero.

After Estimating a Probit Model for Whether an Individual Purchases