Business failures are due to three mutually exclusive risks: market risk, credit risk, and operational risk, which

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Business failures are due to three mutually exclusive risks: market risk, credit risk, and operational risk, which account for 20%, 30%, and 50%, respectively, of all business failures. Suppose the number of business failures each year is Poisson distributed with mean 4.6.

(a) What is the chance that there are two business failures due to operational risk in a year?

(b) What is the chance that the business failures due to market risk and credit risk are both fewer than two in a year?

(c) Given that there are four business failures in a year, what is the probability that two of these are due to market risk

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Fundamentals of Aerodynamics

ISBN: 978-0070016798

2nd Edition

Authors: J. Anderson

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Posted Date: Feb 02, 2024 01:12 PM

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Business failures are due to three mutually exclusive risks: market risk, credit risk, and operational risk, which

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a The probability of two business failures due to operational risk in a year can be calculated using the Binomial distribution which models the number ... View the full answer

Fundamentals of Aerodynamics

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