Hi everyone,
I have made a ROC curve to test the predictive power of the credit rating in estimating the probability of default.
However, the ROC curve is below the reference line by resulting in area=0.4678. Is the result correct? I have read that the minimum value should be equal to 0.5 and maybe something works not very well.
The command that I have used in stata is:
roctab y xi

Can you provide me any suggestions?