ECON 560 - Data Informed Decision Making

Problem Set 3

10 Points

Problem 1 (3 points)

Cyber security experts often talk about how a strong password must be at least 7 characters long to be considered a strong password and prevent hackers from cracking it.

Suppose you are overseeing the implementation of a new password policy at your company for company accounts. Management wants the minimum password length requirement to be 6 characters, so they are easier to remember, but you are advocating for a minimum character length of 7.

In 4-5 sentences, calculate and describe why increasing the password minimum from 6 to 7 characters will improve company account security. Assume that any of the following characters can be used to create passwords and that characters may be used more than once:

• Lower case letters
• Upper case letters
• The numbers 0-9
• 8 different special characters

Problem 2 (4 points)

Suppose that you work for a blood bank and are trying to determine the probability that a donor is of a certain blood type. The following table shows information about blood type in the U.S taken fromstatistica.

	A	B	AB	O
+	.34	.09	.03	.38
_	.06	.02	.01	.07

A. (1 point) What is the probability that a donor is NOT blood type AB?

B. (1 point) What is the probability that a donor is either blood type A or B?

C. (1 point) What is the probability that a donor is either a negative blood type or blood type A?

D. (1 point) What is the probability of getting two blood type O- donors in a row?

Problem 3 (3 points)

You currently work at a local bank that acts as a mortgage lender for homeowners. You have the following information on past borrowers that indicates the number of customers in three different age brackets and how many of them defaulted vs. did not default on their mortgage.

Use the information provided to craft a 4-5 sentence summary of your company's loan portfolio and who the bank should focus on in the future to improve loan repayment.

Proportion by age

Below 35 35 - 6566 and over Total

Total loans 11444 28305 451 40200

No default 9621 25848 376 35845

Yes default 1823 2457 75 4355