# Question: Negative equity is defined as a situation where the mortgage

Negative equity is defined as a situation where the mortgage on a property is more than the market value of the property. During the recent financial crisis, market values of most homes declined resulting in an increase in the proportion of homes with negative equity. This, in turn, led to an increase in home foreclosures. According to Core Logic, 52.4% of home mortgages in Nevada during the fourth quarter of 2012 had negative equity. A random sample of 210 home mortgages was randomly selected.

a. What is the probability that 50% or less of this sample has negative equity?

b. What is the probability that 57% or more of this sample has negative equity?

c. What is the probability that between 49% and 55% of this sample has negative equity?

d. Suppose that 130 home mortgages from this sample have negative equity? Does this result support the claim made by CoreLogic?

a. What is the probability that 50% or less of this sample has negative equity?

b. What is the probability that 57% or more of this sample has negative equity?

c. What is the probability that between 49% and 55% of this sample has negative equity?

d. Suppose that 130 home mortgages from this sample have negative equity? Does this result support the claim made by CoreLogic?

**View Solution:**## Answer to relevant Questions

According to Catalyst, 14.3% executive positions in Fortune 500 companies are occupied by women in 2012. A random sample of 180 Fortune 500 executives was selected. a. What is the probability that 20% or less of this sample ...Quality control programs will often establish control limits that are three standard errors above and below a target mean for a process. A sample is taken from the process, and if the sample mean is within the control limits ...The average selling price of BlackBerry smartphones purchased by a random sample of 35 customers was $ 311. Assume the population standard deviation was $ 35. a. Construct a 90% confidence interval to estimate the average ...Construct a 95% confidence interval to estimate the population mean using the following data: x = 38 σ = 8.5 n = 25 What assumptions need to be made about this population? The following data show the number of hours per day 12 adults spent in front of screens watching television related content: 1.3 4.9 4.2 4.8 7.6 6.9 5.4 2.2 5.3 1.8 2.4 8.3 a. Construct a 95% ...Post your question