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First
National Bank thoroughly investigates its applicants for small
home-improvement loans. Its default record is very impressive: The
probability that a homeowner will default is only .005. The bank has approved
400 small home-improvement loans. Assuming the Poisson probability
distribution applies to this problem:
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(a)
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What is the
probability that no homeowners out of the 400 will default? (Round your answer to 4 decimal places.)
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(b)
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How many of the 400 are expected
not to default?
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(c)
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What is the
probability that 3 or more homeowners will default on their small
home-improvement loans?(Round your answer to 4
decimal places.)
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Probability
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