4.27 A bank frequently makes large installment loans to builders. At any point in time, outstanding loans

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4.27 A bank frequently makes large installment loans to builders. At any point in time, outstanding loans are classified in the following four repayment categories:

A: Current B: Up to 30 days delinquent C: 30–60 days delinquent D: Over 60 days delinquent The bank has established the internal standard that these loans are ‘‘in control’’ as long as the percentage in each category is as follows:

A: 80% B: 12% C: 7% D: 1%

They make frequent spot checks by drawing a random sample of loan files, noting their repayment status at that time and comparing the observed distribution with the standard for control. Suppose a sample of 500 files produces the following data on number of loans in each repayment category:

A: 358 B: 83 C: 44 D: 15 Does it appear that installment loan operations are under control at this time?

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Nonparametric Statistical Inference

ISBN: 9781420077612

5th Edition

Authors: Jean Dickinson Gibbons, Subhabrata Chakraborti

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