At the website Lending Club®, customers can either borrow money or fund money for others’ loans. Access the data about the loans funded at Lending Club in September, 2014, which are available at MyMathLab and at the Pearson Downloadable Student Resources for Math & Stats website.
a. Construct a relative frequency histogram of the loan amounts for those who rent their home, beginning with lower class limit 0 dollars and class width 5000 dollars. Do the same for those who own their home. Finally, do the same for those who have a mortgage on a home.
b. On the basis of shape, which is the better measure of the spread for each of the three distributions described in part (a), the standard deviation or the range? Explain.
c. Find and compare the ranges of the three distributions. What does your comparison mean in this situation?
d. For each histogram you constructed in part (a), mark the location of the mean and the median. For each distribution, do the mean and median appear to be close together or far apart?
e. On the basis of your response to part (d), explain why it might actually be reasonable to compare the standard deviations of the three distributions even though they are skewed.
f. Find and compare the standard deviations of the three distributions.
g. Compare the spreads of the three distributions. Your comparison should refer to your responses in parts (c) and (f) as well as the histograms you constructed in part (a). What does your comparison mean in this situation?