Subprime lending was big business in the United States in the mid-2000s, when lenders provided mortgages to people with

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Subprime Lending Was Big Business In The United States In The Mid 2000s When Lenders Provided Mortgages To People With 1 (17.05 KiB) Viewed 60 times

Subprime lending was big business in the United States in the mid-2000s, when lenders provided mortgages to people with poor credit. However, subsequent Increases in Interest rates coupled with a drop in home values necessitated many borrowers to default. Suppose a recent report finds that two in five subprime mortgages are likely to default nationally. A research economist is interested in estimating default rates in Illinois with 95% confidence. [You may find It useful to reference the z table.] How large a sample is needed to restrict the margin of error to within 0.07, using the reported national default rate? (Round "z" value to 3 decimal places. Do not round Intermediate calculations. Round up your final answer to nearest whole number.) Sample size