# Question: The Troubled Asset Relief Program TARP passed by the U S

The Troubled Asset Relief Program (TARP), passed by the U.S. Congress in October 2008, provided $700 billion in assistance for the struggling U.S. economy. Over $200 billion was given to troubled financial institutions with the hope that there would be an increase in lending to help jump-start the economy. But three months later, a Federal Reserve survey found that two-thirds of the banks that had received TARP funds had tightened terms for business loans (The Wall street Journal, February 3, 2009). Of the 10 banks that were the biggest recipients of TARP funds, only 3 had actually increased lending during this period.

Increased Lending Decreased Lending

BB&T ............ Bank of America

Sun Trust Banks ........ Capital One

U.S. Bancorp ........ Citigroup

Fifth Third Bancorp

J.P. Morgan Chase

Regions Financial

Wells Fargo

For the purposes of this exercise, assume that you will randomly select 3 of these 10 banks for a study that will continue to monitor bank lending practices. Let x be a random variable indicating the number of banks in the study that had increased lending.

a. What is f(0)? What is your interpretation of this value?

b. What is f(3)? What is your interpretation of this value?

c. Compute f(1) and f(2). Show the probability distribution for the number of banks in the study that had increased lending. What value of x has the highest probability?

d. What is the probability that the study will have at least one bank that had increased lending?

e. Compute the expected value, variance, and standard deviation for the random variable.

Increased Lending Decreased Lending

BB&T ............ Bank of America

Sun Trust Banks ........ Capital One

U.S. Bancorp ........ Citigroup

Fifth Third Bancorp

J.P. Morgan Chase

Regions Financial

Wells Fargo

For the purposes of this exercise, assume that you will randomly select 3 of these 10 banks for a study that will continue to monitor bank lending practices. Let x be a random variable indicating the number of banks in the study that had increased lending.

a. What is f(0)? What is your interpretation of this value?

b. What is f(3)? What is your interpretation of this value?

c. Compute f(1) and f(2). Show the probability distribution for the number of banks in the study that had increased lending. What value of x has the highest probability?

d. What is the probability that the study will have at least one bank that had increased lending?

e. Compute the expected value, variance, and standard deviation for the random variable.

## Answer to relevant Questions

The United States Coast Guard (USCG) provides a wide variety of information on boating accidents including the wind condition at the time of the accident. The following table shows the results obtained for 4401 accidents ...Many companies use a quality control technique called acceptance sampling to monitor incoming shipments of parts, raw materials, and so on. In the electronics industry, component parts are commonly shipped from suppliers in ...A random variable is normally distributed with a mean of μ = 50 and a standard deviation of σ = 5.a. Sketch a normal curve for the probability density function. Label the horizontal axis with values of 35, 40, 45, 50, 55, ...Television viewing reached a new high when the Nielsen Company reported a mean daily viewing time of 8.35 hours per household (USA today, November 11, 2009). Use a normal probability distribution with a standard deviation of ...Collina’s Italian Café in Houston, Texas, advertises that carryout orders take about 25 minutes (Collina’s website, February 27, 2008). Assume that the time required for a carryout order to be ready for customer pickup ...Post your question