Mortgages 2013. A December 2013 Bloomberg report on mortgage defaults in Spain reported that the level of
Question:
Mortgages 2013. A December 2013 Bloomberg report on mortgage defaults in Spain reported that the level of defaults was 0.7% in 2007, it rose to 3.5% in 2012, and further increased to 5% in 2013. Suppose a large Spanish bank holds 9,455 of these mortgages.
a) Can you use the Normal model to describe the sampling distribution model for the sample proportion of defaults?
Check the conditions, and discuss any assumptions you need to make.
b) Sketch and clearly label the sampling model, based on the 68–95–99.7 Rule.
c) How many of these homeowners, might the bank expect, will default on their mortgages? Explain.
Step by Step Answer:
Related Book For
Business Statistics
ISBN: 9781292269313
4th Global Edition
Authors: Norean Sharpe, Richard De Veaux, Paul Velleman
Question Posted: