Subprime Mortgages during the 2000–2008 Housing Bubble (Compare Exercise 27 in Section 7.2.) The following chart shows the (approximate) total number of subprime home mortgages in Texas in November 2008, broken down into four categories: 31 Mortgage Status Current Past Due In Foreclosure Repossessed Total Number 136,330 53,310 8,750 5,090 203,480 (The four categories are mutually exclusive; for instance, “Past Due” refers to a mortgage whose payment status is past due but is not in foreclosure, and “In Foreclosure” refers to a mortgage that is in the process of being foreclosed but not yet repossessed.) a. Find the probability that a randomly selected subprime mortgage in Texas during November 2008 was neither in foreclosure nor repossessed. [ HinT: See Example 1.] b. What is the probability that a randomly selected subprime mortgage in Texas during November 2008 was not current?
Subprime Mortgages during the 2000–2008 Housing Bubble (Compare Exercise 27 in Section 7.2.) The following chart shows the (approximate) total number of subprime home mortgages in Texas in November 2008, broken down into four categories: 31 Mortgage Status Current Past Due In Foreclosure Repossessed Total Number 136,330 53,310 8,750 5,090 203,480 (The four categories are mutually exclusive; for instance, “Past Due” refers to a mortgage whose payment status is past due but is not in foreclosure, and “In Foreclosure” refers to a mortgage that is in the process of being foreclosed but not yet repossessed.) a. Find the probability that a randomly selected subprime mortgage in Texas during November 2008 was neither in foreclosure nor repossessed. [ HinT: See Example 1.] b. What is the probability that a randomly selected subprime mortgage in Texas during November 2008 was not current?
Solution Summary: The author calculates the probability that a randomly subprime mortgage in Texas during 2008 was neither in foreclosure nor repossessed.
Subprime Mortgages during the 2000–2008 Housing Bubble (Compare Exercise 27 in Section 7.2.) The following chart shows the (approximate) total number of subprime home mortgages in Texas in November 2008, broken down into four categories:31
Mortgage Status
Current
Past Due
In Foreclosure
Repossessed
Total
Number
136,330
53,310
8,750
5,090
203,480
(The four categories are mutually exclusive; for instance, “Past Due” refers to a mortgage whose payment status is past due but is not in foreclosure, and “In Foreclosure” refers to a mortgage that is in the process of being foreclosed but not yet repossessed.)
a. Find the probability that a randomly selected subprime mortgage in Texas during November 2008 was neither in foreclosure nor repossessed. [HinT: See Example 1.]
b. What is the probability that a randomly selected subprime mortgage in Texas during November 2008 was not current?
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