According to the Mortgage Bankers Association of America, the foreclosure rate on home mortgages in 2001 was

Question:

According to the Mortgage Bankers Association of America, the foreclosure rate on home mortgages in 2001 was 1%. Assuming that this rate is applicable to a community where 1000 homes have mortgages, use the Poisson approximation to the binomial distribution to determine the following for x = the number of foreclosures in this community during the coming year:

a. E(x)

b. P(x = 7)

c. P(x = 10)

d. P(x ≤ 12)

e. P(8 ≤ x ≤ 15)

Distribution
The 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...