Answered step by step
Verified Expert Solution
Question
1 Approved Answer
1 points You have developed a set of criteria for evaluating distressed credits. Companies that do not receive a passing score are classed as likely
1 points You have developed a set of criteria for evaluating distressed credits. Companies that do not receive a passing score are classed as likely fo go bankrupt within 12 months. You gathered the following information when validating the criteria: - Twenty (not forty) percent of the companies to which the test is administered will go bankrupt within 12 months: P(nonsurvivor) =0.20. - Eighty percent of the companies to which the test is administered pass it: P( pass test )=0.80 - The probability that a company will pass the test given that it will subsequently not survive 12 months is 0.50:P( pass test i nonsurvivor) =0.50 What is P(nonsurvivor | fails test)? Give your answer as a probability rounded to two digits, so in the format 0.XX
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started