Discriminant Analysis

Suppose you are a consultant hired by a bank to predict whether a  small business will default on a loan given 1) the number of days a  small business is delinquent on a loan and 2) the number of months a  small business has been doing business with the bank.  Before using  linear discriminant analysis to classify whether a small business will  default, please

1) test the assumptions surrounding linear discriminant  analysis,

2) use the unstandardized linear discriminant function  coefficients to solve for the discriminant function score, and

3) assess  classification accuracy.  Note: You do not have to implement validation  procedures discussed in our video.

4)Finally, use the  “da_default_data.XLS” attached to obtain, examine, and interpret  results.

***Explain thoroughly***