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Can you explain this question. In early 2009, rising unemployment and the house-price slump in a large region led to a mortgage delinquency rate of
Can you explain this question.
In early 2009, rising unemployment and the house-price slump in a large region led to a mortgage delinquency rate of 0.52% of all big bank mortgages. Suppose a large bank holds 1,809 mortgages.
- Can you apply the Central Limit Theorem to describe the sampling distribution model for the sample proportion of delinquencies? To answer this question determine whether the relevant conditions and assumptions have been met.
- Determine the mean and standard deviation of this sampling distribution.
- Determine the sample proportions for the 68-95-99.7 rule. Fill in the blanks on the curve below.
- The bank might expect that the proportion of homeowners who are delinquent to be within 2 stdev of the mean. Calculate an interval for the number of homeowners the bank might expect to be delinquent on their mortgage.
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