The Credit Risk Department of a major bank estimates the default rate on loans under$

10,000 to be1%. The bank will make1100 loans that are under$10,000

next month.

A Find the mean ofp, wherep is theproportion of defaults on the1100 loans under$

10,000 to be made next month.

(b)Find the standard deviation ofp

(c)Compute an approximation forP(p0.02) which is the probability that2% or more of next month's loans under$10,000 will be defaulted on. Round your answer to four decimal places.