Concept explainers
In examining borrower characteristics versus loan delinquency, a bank has collected the following information: (1) 15% of the borrowers who have been employed at their present job for less than 3 years are behind in their payments. (2) 5% of the borrowers who have been employed at their present job for at least 3 years are behind in their payments, and (3) 80% of the borrowers have been employed at their present job for at least 3 years. Given this information:
a. What is the
b. What is the probability that a randomly selected loan account will be for a person in the same job for less than 3 years or who is behind in making payments?
c. If a loan account is behind, what is the probability that the loan is for a person who has been in the same job for less than 3 years?
Want to see the full answer?
Check out a sample textbook solutionChapter 5 Solutions
Introduction to Business Statistics
Additional Math Textbook Solutions
Elementary Statistics Using Excel (6th Edition)
Statistics: The Art and Science of Learning from Data (4th Edition)
Elementary Statistics Using The Ti-83/84 Plus Calculator, Books A La Carte Edition (5th Edition)
STATISTICS F/BUSINESS+ECONOMICS-TEXT
Elementary Statistics ( 3rd International Edition ) Isbn:9781260092561
Introduction to Statistical Quality Control
- What is the total effect on the economy of a government tax rebate of $500 to each household in order to stimulate the economy if each household will spend of the rebate in goods and services?arrow_forward1. Diversty or be Sued! An investor with a stock portfolio worth several hundred thousand dollars sued his broker because lack of diversification in his portfolio led to poor performance (low returns) The table below gives the rates in percentages for the 39 months that the account was managed by the broker. An arbitration panel composed these returns with average of the Standard and Poor's stock index for the same period. Consider the 39 SRS monthly returns the broker would generate if he managed the account forever. Are these returns compatible with a population mean of .95%, the S&P 500 averaged over 35 years? The numbers are already in percentages. -2.93 -15.25 1.28 -1.01 -8.36 1.62 -2.27 -2.7 -2.93 -9.14 -2.64 6.82 -2.35 -3.58 -5.11 5.04 -9.16 12.22 -2.56 -1.25 -7.21 4.33 6.13 7.00 -1.44 -2.14 -8.66 -65 -1.41 -1.03 4.34 -1.22 -.09 2.35 -10.27 7.34 -7.24 12.03 Test the investors' claim at the alpha level .05 significance level. (name the hypotheses, parameter, type of test and make…arrow_forwardThe Majoring in Money study by Sallie Mae from December 2015 showed that most college students manage their credit cards in a reasonable way. It showed that almost two-thirds of students pay their credit card balance in full every month and 25% of students who own credit cards make partial payments that exceed the minimum amount due. You are curious to find out if credit card payment behavior of students has changed since 2015 and collect data from a random sample of 370 students. You find that 71 students are making partial payments on their credit cards that exceed the minimum amount due. Using α=0.01, complete parts a and b below.arrow_forward
- 5. Martina's employer offers anannual pension benefit calculated by multiplying 2.35% of the career average salary times the number of years employed. Here are Martina's annual salaries over the last 24 years of employment. 28,800 29,300 30,250 31,000 35,500 42,000 45,000 50,000 28,800 29,900 30,350 35,000 35,700 43,000 48,000 52,000 29,210 29,900 30,450 35,000 38,000 43,900 48,800 52,000 a. What is Martina's career average salary? b. What is Martina's annual pension under this plan? c. What percentage of her final annual salary will her annual retirement salary be to the nearest percent? d. What is Martina's monthly pension benefit to the nearest penny?arrow_forward2. Mala-Inse Company sells its products on account payable in 30 days from the date of sale. Customers are given three percent discount if they pay within ten days. Total sales for the year amounted to P900,000. Records of the company shows that forty percent of the customers pay on the tenth day and take the discounts; while 60 percent pay on average of 45 days after the date of purchase. Determine the average amount of receivables?arrow_forwardBased on past experience, a bank believes that 7% of the people who receive loans will not makepayments on time. The bank has recently approved 200 loans. (b)70% of the timely payments will not be made by over how many percentages of clients? (c)40% of the timely payments will not be made by under how many percentages of clients?.arrow_forward
- 3. An assesses depreciated the machinery of his factory by 10% each in the first two years and by 40% in the third year and thereby claimed 21% average depreciation relief from taxation department, but the I.T.O. objected and allowed only 20%. Show which of the two is right. 4. The mean weight of 150 students in a certain class is 60 kilograms. The mean weight of boys in the class is 70 kilogram and that of the girls is 55 kilograms. Find the number of boys and number of girls in the class.arrow_forwardAccording to the IRS, individuals filing federal income tax returns prior to March 31 received an average refund of $1056 in 2018. Consider the population of “last-minute” filers who mail their tax return during the last five days of the income tax period (typically April 10 to April 15). A researcher suggests that a reason individuals wait until the last five days is that on average these individuals receive lower refunds than do early filers. For a sample of 400 individuals who filed a tax return between April 10 and 15, the sample mean refund was $910. Based on prior experience, a population standard deviation of σ = $1,600 may be assumed. Test the researcher's assertion using the critical value approach. Use α = 0.05 (Please include all the 7 steps in hypothesis testing) Steps in hypothesis testing p-value Approach Develop the null and alternative hypothesis Specify the level of significance, α Choose the test statistic (z or t) Calculate the test statistic Use the value of the…arrow_forwarda) Genenesis Dispensary is contemplating of opening a new branch in Mwanza. If the medical for medical service is favourable, Genesis could realize a net profit of Tsh.100 million. On the other hand, if the market turn out to be unfavourable, it can end up losing Tsh. 40 million. Of course, Genesis may opt not to persue this option of expanding its operations. In the absence of data from which to base its decision, te best guess for Gensis is equally likely that the dispensary will either be successful or unsuccessful Required: i) Use the decison tree approach, what decison should Genesis Dispensary take b) Market research firm named, Easy Market Access approach Genesis with an offer to undertake a study of Mwanza medical service market at a fee of Tsh. 5 million. Easy Market Access claims that their experience enables them to use Bayes’ Theoremn to make the following statements about different state of the market: ▪ Provide that the study is favourable, the probability of favourable…arrow_forward
- Meier and Frank is a chain of department stores located in the Northwest. The company has issued its own credit cards for a number of years. As a new employee in the finance department, imagine that you have been assigned to a major investigation of the firm’s credit policies designed to reduce bad debt losses. You are requested to investigate the relationship between marital status at the time the card is issued and the subsequent payment record of the individual. You randomly select 100 credit cards issued three years previously. Of the 70 individuals that were married at the time the cards were issued, 11 have defaulted on a payment. Of the 30 individuals who were single when the cards were issued, 7 have defaulted. Do these data present sufficient evidence to indicate that marital status affects credit-worthiness? Use Alpha = 0.05.arrow_forwardLahey Motors specializes in selling cars to buyers with a poor credit history. Listed is the number of cars that were repossessed from Lahey customers because they did not meet the payment obligations over each of the last 36 months. 7 10 11 4 11 22 12 10 10 15 15 6 13 12 12 19 8 9 10 15 8 14 8 11 15 7 17 15 8 6 10 10 13 I Click here for the Excel Data File (Leave no cells blank - be certain to enter "O" a. Find the control limits from the c-bar data for the number repossessed wherever required. Round your answers to 2 decimal places.) Mean number of defects per unit LCL UCL b. Were there any months when the number was out of control? O Yes O Noarrow_forwardThe government is attempting to determine whetherimmigrants should be tested for a contagious disease. Let’sassume that the decision will be made on a financial basis.Assume that each immigrant who is allowed into the countryand has the disease costs the United States $100,000, andeach immigrant who enters and does not have the diseasewill contribute $10,000 to the national economy. Assumethat 10% of all potential immigrants have the disease. Thegovernment may admit all immigrants, admit no immigrants,or test immigrants for the disease before determiningwhether they should be admitted. It costs $100 to test aperson for the disease; the test result is either positive ornegative. If the test result is positive, the person definitelyhas the disease. However, 20% of all people who do havethe disease test negative. A person who does not have thedisease always tests negative. The government’s goal is tomaximize (per potential immigrant) expected benefits minusexpected costs. Use a decision…arrow_forward