Suppose you work at a firm that classifies bankruptcies as small (less than $70 million), medium (between
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Question:
Suppose you work at a firm that classifies bankruptcies as small (less than $70 million), medium (between $70 million and $95 million) and large (over $95 million). Overall, bankruptcies are distributed normal with a mean of $80 million and standard deviation of $20 million. Suppose also that the average time between bankruptcies is 10 days. What is the probability that there will be exactly two bankruptcies in the next 30 days and that the first one is a small bankruptcy and the second one is a large bankruptcy?(Assume the number of bankruptcies and their size are independent variables, and the size of one firm's bankruptcy has no effect on the size of another firm's bankruptcy) Please give your answer to the nearest 0.1%.
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