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e) Moss Ima Loan Company compartments credit applicants as Good and Bad risks. On the average, 10% of applicants are Bad risks. Moss Ima uses
e) Moss Ima Loan Company compartments credit applicants as Good and Bad risks. On the average, 10% of applicants are Bad risks. Moss Ima uses a refined computerized credit scoring model to attempt to discriminate between these 2 groups. A study of their experience in using the model yielded interesting results. Moss Ima's gives credit to good risks 90% of the time. Bad risks get credit only 20% of the time. Assume that a person selected at random from potential applicants to Moss Ima's applies for credit and is granted a loan. What is the probability that he/she is good risk? (Let BR=Bad Risk, GR=Good Risk and CG=Credit Granted)
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