Question: The default rate for a specific class of loans is 2%. a. What is the probability distribution for the default of a single loan? b.

The default rate for a specific class of loans is 2%.

a. What is the probability distribution for the default of a single loan?

b. What is the probability distribution for the number of loans defaulting from a portfolio of 3500 loans?

c. What is the probability distribution for the percentage of loans defaulting from a portfolio of 3500 loans?

d. Calculate the probability of more than 60 loans defaulting from a portfolio of 3500 loans.

e. Calculate the probability of at least 50 loans defaulting from a portfolio of 3500 loans.

f. Create a simulation to calculate the probability of more than 60 loans defaulting from a portfolio of 3500 loans.

g. Create a simulation to calculate the probability of at least 50 loans defaulting from a portfolio of 3500 loans.

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