# Question: The bad debt ratio for a financial institution is defined

The bad debt ratio for a financial institution is defined to be the dollar value of loans defaulted divided by the total dollar value of all loans made. Suppose a random sample of seven Ohio banks is selected and that the bad debt ratios (written as percentages) for these banks are 7 percent, 4 percent, 6 percent, 7 percent, 5 percent, 4 percent, and 9 percent. Assuming the bad debt ratios are approximately normally distributed, the MINITAB output of a 95 percent confidence interval for the mean bad debt ratio of all Ohio banks is given below. Using the sample mean and sample standard deviation on the MINITAB output, demonstrate the calculation of the 95 percent confidence interval, and calculate a 99 percent confidence interval for the population mean debt- to-equity ratio.

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

Air traffic controllers have the crucial task of ensuring that aircraft don’t collide. To do this, they must quickly discern when two planes are about to enter the same air space at the same time. They are aided by video ...The mean and the standard deviation of the sample of 40 trash bag breaking strengths in Table 1.9 are 50.575 and 1.6438, respectively. a. Use the Excel output in Figure to calculate a t-based 95 percent confidence interval ...Referring to Exercise 8.21 (page 307), regard the sample of five trial runs (which has standard deviation 19.65) as a preliminary sample. Determine the number of trial runs of the chemical process needed to make us: In ...Suppose that 60 percent of 1,000 randomly selected U.S. adults say that they take part in some form of daily activity to keep physically fit. Based on this finding, find a 95 percent confidence interval for the proportion of ...Explain why the finite population correction√(N – n) / N is unnecessary when the sample size is less than 5 percent of the population size. Give an example using numbers.Post your question