1. A recent survey of banks revealed the following distribution for the interest ratebeing charged on a home loan (based on a 30-year mortgage with a 10% downpayment).Interest Rate7.0%7.5%8.0%8.5%> 8.5%Probability0.120.230.240.350.06If a bank is selected at random from this distribution, what is the chance that theinterest rate charged on a home loan will exceed 8.0%?

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Answered: 1. A recent survey of banks revealed…

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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A lab orders 100 rats a week for each of the 52 weeks in the year for experiments that the lab conducts. Prices for 100 rats follow the following distribution: Price: $10.00 $12.50 $15.00 Probability: 0.35 0.40 0.25 How much should the lab budget for next year's rat orders be, assuming this distribution does not change?
The monthly incomes for 12 randomly selected people, each with a bachelor's degree in economics, are shown on the right. Complete parts (a) through (c) below. Assume the population is normally distributed. 4450.04 4596.08 4366.42 4455.64 4151.49 3727.22 4283.36 4527.36 4407.11 3946.91 4023.06 4221.57 (a) Find the sample mean. x = 4263.0 (Round to one decimal place as needed.) (b) Find the sample standard deviation. s = 260.0 (Round to one decimal place as needed.) (c) Construct a 90% confidence interval for the population mean μ. A 90% confidence interval for the population mean is (Round to one decimal place as needed.)
From this normal probability plot,what pattern is seen in the plot. A.The points form a distinct "S" pattern along a line through the plot's origin. B.The points are evenly distributed across the plot. C.The points are generally clustered along a straight line through the plots's origin. D.The points form a distinct curve from the bottom left to the top right of the plot.
A company offers a 2-year warranty on a product for $35. Replacing the product to the consumer who purchases the warranty costs the company $200. The quality control division estimates that 0.25% of their products will fail within the fırst 2 years. What is the company's expected value for each warranty sold?
Find the mean of the following probability distribution. Complete the table below. H P(H) Н.Р(Н) 0.06 1 0.70 2 0.20 0.03 4 0.01 P(H) 3/10 2/5 1/5 1/10 H H.P(H) 2 4 5
Let X = {Email, In Person, Instant Message, Text Message}; P(Email) = 0.06 P(In Person) = 0.55 P(Instant Message) = 0.24 P(Text Message) = 0.15 Is this model a probability distribution? A. Yes. B. No. C. Maybe.
A certain model phone costs $599. The probability of the phone breaking over the course of a year is .07. What is the maximum amount you could pay for phone replacement insurance and still have a non-negative expected value on the policy? In other words, for what price or below would it be worth it to get the insurance?
2. Statistical measures of stand-alone risk Remember, the expected value of a probability distribution is a statistical measure of the average (mean) value expected to occur during a possible circumstances. To compute an asset's expected return under a range of possible circumstances (or states of nature), multiply the anticipated return expected to result during each state of nature by its probability of occurrence. Consider the following case: Ethan owns a two-stock portfolio that invests in Happy Dog Soap Company (HDS) and Black Sheep Broadcasting (BSB). Three- quarters of Ethan's portfolio value consists of HDS's shares, and the balance consists of BSB's shares. Each stock's expected return for the next year will depend on forecasted market conditions. The expected returns from the stocks in different market conditions are detailed in the following table: Market Condition Probability of Occurrence Happy Dog Soap Black Sheep Broadcasting Strong 0.50 50% 70% Normal 0.25 30% 40% Weak…
Question 5: A department store prints scratch-and-save discount coupons to distribute to its customers. The numbers for each present discount are shown in the table. Present Discount Number of Each type of discount Available 60% 50 50% 25000 30% 50000 10% 500,000 Determine the expected percent discount. Question 6: An examination consists of 50 multiple-choice items, each with 4 possible answers. what is the probability of guessing 25 or more correct answers? Question 7: A. bank found that 25% of its loans to new small business become delinquent. Ten small business are selected randomly from the bank's files. a) what is probability that three of them are delinquent? b) what is the probability that at least three of them are delinquent? c) what is the expected delinquency? B. Geometric Distribution Q8: Explain why rolling a die until 3 shows can be modelled by a geometric distribution
Amount of claim (to nearest $20,000) Probability $0 0.70 $20,000 0.17 $40,000 0.06 $60,000 0.04 $80,000 0.02 $100,000 0.01 A. Calculate the expected value? B. How much should the company charge as an average premium so that it breaks even on its claim costs? C. How much should the company charge to make a profit of $50 per policy?
In case-crossover studies, all fixed individual characteristics that might confound the association of interest are controlled for. A. True B. False C.Neither
You are given the following probability distribution for the returns on Security A and Security B: Probability 0.3 0.3 0.3 0.1 Return on Security A 37% 7% 20% -15% Return on Security B 13% 19% 26% -22% Assume you invest $4,000 in Security A and $6,000 in Security B. What are the expected return and standard deviation of your portfolio?

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