
Concept explainers
Subprime Mortgages during the 2000–2008 Housing Bubble (Compare Exercise 28 in Section 7.2.) The following chart shows the (approximate) total number of subprime home mortgages in Florida in November 2008, broken down into four categories:32
Mortgage Status | Current | Past Due | In Foreclosure | Repossessed | Total |
---|---|---|---|---|---|
Number | 130,400 | 73,260 | 72,380 | 17,000 | 293,040 |
(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 Florida during November 2008 was either in foreclosure or repossessed. [HinT: See Example 1.]
b. What is the probability that a randomly selected subprime mortgage in Florida during November 2008 was not repossessed?

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Chapter 7 Solutions
Finite Mathematics
- 5) For each function represented by an equation, make a table and plot the corresponding points to sketch the graph of the function. (a) y = 75 ()* 220 X y 200- -2 180 160 -1 140 0 120 100 1 60 80 2 3 4 x (b) y = 20 ()* 1 60 40 20 20 0 2 3 65- -1 X y 60 -2 55- 50 45 44 40 0 35- 30 1 25 2 20 20 15 3 10 5 LO 4 3-2 T -1 0 5- 4- -3- 2-arrow_forward5. Find the solution to each of the following by using an appropriate formula developed in the lecture slides: (a) + 3y = 2, y(0) = 4; (b) dy - 7y = 7, y(0) = 7; (c) 3d+6y= 5, y(0) = 0arrow_forward1. Evaluate the following improper integrals: (a) fe-rt dt; (b) fert dt; (c) fi da dxarrow_forward
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- 4. Let A = {a, b, c, d, e, f}, B = {e, f, g, h} and C = {a, e, h,i}. Let U = {a, b, c, d, e, f, g, h, i, j, k}. • Draw a Venn Diagram to describe the relationships between these sets Find (AB) NC • Find (AC) UB Find AUBUC • Find (BC) N (A - C)arrow_forward7. A consumer lives on an island where she produces two goods x and y according to the production possibility frontier x² + y² < 200 and she consumes all the goods. Her utility function is U(x, y) = x y³. She faces an environmental constraint on her total output of both goods. The environmental constraint is given by x + y ≤20. • (a) Write down the consumer's optimization problem. (b) Write out the Kuhn-Tucker first order conditions. (c) Find the consumer's optimal consumption bundle (x*, y*).arrow_forward3. Answer the following questions: (a) Given the marginal propensity to import M'(Y) = 0.1 and the information that M = 20 when Y = 0, find the import function M(Y). (b) Given a continuous income stream at the constant rate of $1,000 per year, what will be the present value II if the income stream terminates after exactly 3 years and the discount rate is 0.04? (c) What is the present value of a perpetual cash flow of $2,460 per year, discounted at r = 8%?arrow_forward
- 5. Let A and B be arbitrary sets. Prove AnB = AUB.arrow_forward2. Answer the following questions: (a) Given the marginal-revenue function R'(Q) = 28Q - €0.3Q, find the total-revenue function R(Q). What initial condition can you introduce to definitize the constant of integration? = (b) Given the marginal propensity to consume C'(Y) 0.80.1Y-1/2 and the information that C = Y when Y = 100, find the consumption function C(Y).arrow_forwardX GG G + C td.bksblive2.com.au/bksblive2/Play... E R New Chrome available CANVAS gmetrix N notion Six big immigratio... >>> All Bookmarks 1.1 ACSF L5 SC Geometry and Measure: Vectors Vectors State the vector quantities shown on the image below. AB = CD' = A B D < C 80 esc F1 F2 F3 F4 ? Help 7arrow_forward
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