Study shows that 70% of bank loans are to individuals and 30% are to small businesses. Among the loans to individuals, 10% end up in default, 82% are repaid on time, and 8% are repaid late. Among the loans to small businesses, 20% end up in default, 70% are repaid on time, and 10% are repaid late. If you select one loan at random and find that it ended up in

Study shows that 70% of bank loans are to individuals and 30% are to small businesses. Among the loans to individuals, 10% end up in default, 82% are repaid on time, and 8% are repaid late. Among the loans to small businesses, 20% end up in default, 70% are repaid on time, and 10% are repaid late. If you select one loan at random and find that it ended up in

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MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Concept explainers

Contingency Table

A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.

Binomial Distribution

Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.

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Question

Study shows that 70% of bank loans are to individuals and 30% are to small businesses.
Among the loans to individuals, 10% end up in default, 82% are repaid on time, and 8% are
repaid late. Among the loans to small businesses, 20% end up in default, 70% are repaid on
time, and 10% are repaid late. If you select one loan at random and find that it ended up in
default, what is the probability that the loan was to a small business?

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