A bank makes loans to small businesses and on average 4.5% of them default on their loans within five years. The bank m
Posted: Sun Jul 10, 2022 10:17 am
A bank makes loans to small businesses and on average 4.5% ofthem default on their loans within five years. The bank makesprovision for these losses when it makes its financial plans. TheVice President in charge of small business loans thinks that thedefault rate may be going down and gives you a random sample of 273recent loans of which 7 defaulted within five years. What advice doyou give to the Vice President?
The probability that 7 or fewer of the 273 small businessesdefault on their loans is ____. Using 5% as thecriterion for an unlikely event, there is a relatively(high/low) probability that 7 or fewer of the 273small businesses would default, so there is (insufficientevidence/evidence) to support the claim that the defaultrate may be going down.
(Round to three decimal places as needed.)
The probability that 7 or fewer of the 273 small businessesdefault on their loans is ____. Using 5% as thecriterion for an unlikely event, there is a relatively(high/low) probability that 7 or fewer of the 273small businesses would default, so there is (insufficientevidence/evidence) to support the claim that the defaultrate may be going down.
(Round to three decimal places as needed.)