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On a peer-to-peer (P2P) lending website, borrowers complete an approval scoring form that lenders use to assess creditworthiness. Lenders generally believe that borrowers who score
On a peer-to-peer (P2P) lending website, borrowers complete an approval scoring form that lenders use to assess creditworthiness. Lenders generally believe that borrowers who score at least 72 do not default on loans. Consequently, borrowers are rated A if their overall score is at least 72, otherwise they are rated B. A reasonably large sample of real borrower data was collected: i. among those that did not default on their loans, initial approval scores were normally distributed with a mean of 77.2 and a standard deviation of 7.9. ii. among those that defaulted on their loans, initial approval scores were normally distributed with a mean of 66.3 and a standard deviation of 10.3. Report each answer as a decimal (not percent) accurate to at least 4 decimal places. Answers from software or from rounded z-scores (to 2 decimal places) are accepted. 1. What proportion of borrowers that: 3) did not default were initially rated A? C] b) defaulted were initially rated B? [:1 c) did not default were miscategorized initially? C] Screenshot d) defaulted were miscategorized initially? C] 2. Among those that did not default, what is the probability that a borrower: a) scored above 81.1? C] b) scored below 68 or above 85.3? C] c) was rated B and scored above 63.6? C] d) was rated A and scored below 81.1? C] e) was rated B given scored below 77.2? D f) scored above 77.2 given rated A? [3 Question Help: I: Video El Message instructor W Screenshor A .- . - A
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