Mortgages In early 2009, rising unemployment and the house-price slump in Alberta led to a mortgage delinquency rate of 0.54% of all big bank mortgages (rising for the nineteenth straight month), the highest delinquency rate in Canada. Suppose a large bank holds 1731 mortgages.

a) Can you apply the Central Limit Theorem to describe the sampling distribution model for the sample proportion of delinquencies? 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 to be delinquent on their mortgages? Explain.