Question: Of a finance company s loans 1 are defaulted not completely
Of a finance company’s loans, 1% are defaulted (not completely repaid). The company routinely runs credit checks on all loan applicants. It finds that 30% of defaulted loans went to poor risks, 40% to fair risks, and 30% to good risks. Of the nondefaulted loans, 10% went to poor risks, 40% to fair risks, and 50% to good risks. Use Bayes’ Formula to calculate the probability that a poor-risk loan will be defaulted.
Relevant QuestionsIn reporting highway safety, the National Highway Traffic Safety Administration (NHTSA) reports the number of deaths in automobile accidents each year. If there is a decrease in the number of traffic deaths from the previous ...In a January 15, 1998, article, the New England Journal of Medicine (338: 141–146) reported on the utility of using computerized tomography (CT) as a diagnostic test for patients with clinically suspected appendicitis. ...The quality control department examines all the products returned to a store by customers. An examination of the returned products yields the following assessment: 5% are defective and not repairable, 45% are defective but ...Let y be a random variable having a normal distribution with mean equal to 250 and standard deviation equal to 50. a. Find a value y0, such that P(y > y0) = .01. b. Find a value y0, such that P(y > y0) = .025. c. Find two ...Psychomotor retardation scores for a particular group of manic-depressive patients have approximately a normal distribution with a mean of 930 and a standard deviation of 130. A random sample of 20 patients from the group ...
Post your question