The cases on probability of defaulting on student’s loans. Concept Introduction: Sample size : The specific number of observations that are chosen from a population to represent the whole population is referred as sample size. The small sample size does not give accurate results, whereas the large sample size includes a huge amount of cost and time. Explanation: Circumstances under which students who seek loan do not care about the size of their financial obligations are: When students are of high-ability and will be enrolled in high-paid jobs. As they are usually of top colleges, they will be paid far more as compared to low-ability students who may have troubles in paying student-loan. High performing students in engineering, medicine at top schools also do not care about the size of loan, as they will also be paid well. If a graduate student has taken a loan and is working at government institute or non-profit organization, then government pays loan on behalf of a student in case of default.

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Chapter 22, Problem 3DQ

To determine

The cases on probability of defaulting on student’s loans.

Concept Introduction:

Sample size:

The specific number of observations that are chosen from a population to represent the whole population is referred as sample size. The small sample size does not give accurate results, whereas the large sample size includes a huge amount of cost and time.

Explanation:

Circumstances under which students who seek loan do not care about the size of their financial obligations are:

When students are of high-ability and will be enrolled in high-paid jobs. As they are usually of top colleges, they will be paid far more as compared to low-ability students who may have troubles in paying student-loan.

High performing students in engineering, medicine at top schools also do not care about the size of loan, as they will also be paid well.

If a graduate student has taken a loan and is working at government institute or non-profit organization, then government pays loan on behalf of a student in case of default.

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