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The Credit Risk Department of a major bank estimates the default rate on loans under $10,000 to be 2% . The bank will make 1600 loans that are under $10,000 next month. Answer the following. (If necessary, consult a list of formulas.) (a)Find the mean of p , where p is the proportion of defaults on the 1600 loans under $10,000 to be made next month. (b)Find the standard deviation of p . (c)Compute an approximation for P≤p0.01 , which is the probability that 1% or fewer of next month's loans under $10,000 will be defaulted on. Round your answer to four decimal places.

The Credit Risk Department of a major bank estimates the default rate on loans under $10,000 to be 2% . The bank will make 1600 loans that are under $10,000 next month. Answer the following. (If necessary, consult a list of formulas.) (a)Find the mean of p , where p is the proportion of defaults on the 1600 loans under $10,000 to be made next month. (b)Find the standard deviation of p . (c)Compute an approximation for P≤p0.01 , which is the probability that 1% or fewer of next month's loans under $10,000 will be defaulted on. Round your answer to four decimal places.

MATLAB: An Introduction with Applications
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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Question

The Credit Risk Department of a major bank estimates the default rate on loans under

$10,000

to be

2%

. The bank will make

1600

loans that are under

$10,000

next month.

 

Answer the following. (If necessary, consult a list of formulas.)

(a)Find the mean of
p
, where
p
is the proportion of defaults on the
1600
loans under
$10,000
to be made next month.
 
(b)Find the standard deviation of
p
.
 
(c)Compute an approximation for
P≤p0.01
, which is the probability that
1%
or fewer of next month's loans under
$10,000
will be defaulted on. Round your answer to four decimal places.
 

 

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