If the determining function for the likelihood of a mortgage application receiving a loan is given by, Loan Successful = 0.60 + 0.01 Credit Score. What would be the causal effect of increasing your credit score by 10 points?
A) Your expected probability of getting a loan would be 0.60 + 0.01(10) = 0.61.
B) Your expected probability of getting a loan would be 0.60
C) Your expected probability of getting a loan would increase by 0.01(10) = 0.10
D) Your expected probability of getting a loan would increase by 10.

Question

Quizplus · Accepted Answer

The causal effect of increasing your credit score by 10 points is calculated by multiplying the coefficient of the credit score (0.01) by the increase in points (10), which equals 0.10. This means the expected probability of getting a loan increases by 0.10, not to 0.10.

If the Determining Function for the Likelihood of a Mortgage