October 2018
Intermediate to advanced
172 pages
4h 6m
English
As the name implies, logistic regression is fundamentally derived from the linear regression algorithm. The linear regression algorithm will be discussed in depth in the upcoming chapters. For now, let's consider a hypothetical case in which we want to predict the probability that a particular loan will default based on the loan's interest rate. Using linear regression, the following equation can be constructed:
Default = (Interest Rate × x) + c
In the preceding equation, c is the intercept and x is a coefficient that will be the output from the logistic regression model. The intercept and the coefficient will have numeric values. For the purpose of this example, let's assume c is 5 and ...
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