Based on past experience, a bank believes that 4% of the people who receive loan

Question

Based on past experience, a bank believes that 4% of the people who receive loans will not make payments on time. The bank has recently approved 300 loans. 6% of these clients did not make timely payments. What is the probability that over 6% will not make timely payments? 0.0721 0.9279 0.9616 0.0384 Suppose the proportion of all college students have used marijuana in the past is rho = 0.40. In a class of 200 students that are representative of all college students, would it be unusual for the proportion who have used marijuana in the past 6 months to be less than 0.32? No Cannot be determined Yes Explain how you made your decision in question #4.

Explanation / Answer

Solution:-

3) The probability that over 6% will not make timely payments is 0.03434.

p = 4/100 = 0.04

x = 0.06 × 300 = 18

x = 18

n = 300

By applying binomial distribution:-

P(x, n, p) = nCx*px*(1 - p)(n - x)

P(x > 18) = 0.03434

4) Yes, it is unusual, for the proportion who used marizona in the past six months to be less than 0.32.

p = = 0.40

x = 0.32 × 200 = 64

x = 64

n = 200

By applying binomial distribution:-

P(x, n, p) = nCx*px*(1 - p)(n - x)

P(x < 32 ) = 0.007979

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