4.27 A bank frequently makes large installment loans to builders. At any point in time, outstanding loans
Question:
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?
Step by Step Answer:
Nonparametric Statistical Inference
ISBN: 9781420077612
5th Edition
Authors: Jean Dickinson Gibbons, Subhabrata Chakraborti