If you are a loan officer at a bank, you want to be able to identify characteristics that are indicative of people who are likely to default on loans, and you want to use those characteristics to identify good and bad credit risks.

Suppose information on 850 past and prospective customers is contained in bankloan.sav. The first 700 cases are customers who were previously given loans. Use a random sample of these 700 customers to create a discriminant analysis model, setting the remaining customers aside to validate the analysis. Then use the model to classify the 150 prospective customers as good or bad credit risks.