Setting the random seed allows you to replicate the random selection of cases in this analysis.

To set the random seed, from the menus choose:

Transform
Random Number Seed...

Select Set seed to and type 9191972 in the text box.

Click OK.

To create the selection variable for validation, from the menus choose:

Transform
Compute...

Type validate in the Target Variable text box.

Type rv.bernoulli(0.7) in the Numeric Expression text box.

This sets the values of validate to be randomly generated Bernoulli variates with probability parameter 0.7.

You only intend to use validate with cases that could be used to create the model; that is, previous customers. However, there are 150 cases corresponding to potential customers in the data file.

To perform the computation only for previous customers, click If.

Select Include if case satisfies condition.

Type MISSING(default) = 0 as the conditional expression.

This ensures that validate is only computed for cases with non-missing values for default; that is, for customers who previously received loans.

Click Continue.

Click OK in the Compute Variable dialog box.

Approximately 70 percent of the customers previously given loans will have a validate value of 1. These customers will be used to create the discriminant function. The remaining customers who were previously given loans will be used to validate the model results.