According to Experian, 2.4% of car-loan payments were 30 days past due in 2016. Lenders prefer auto
Question:
According to Experian, 2.4% of car-loan payments were 30 days past due in 2016. Lenders prefer auto loans to home mortgages because when borrowers get into financial trouble they tend to pay the auto loan first because cars are more easily seized by banks. A random sample of 24 car loans was randomly selected.
a. Use the binomial distribution to determine the probability that exactly one loan is 30 days past due from this sample.
b. Use the binomial distribution to determine the probability that exactly four loans are 30 days past due from this sample.
c. Use the Poisson distribution to determine the probability that exactly one loan is 30 days past due from this sample.
d. Use the Poisson distribution to determine the probability that exactly four loans are 30 days past due from this sample.
DistributionThe word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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