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Determining Probability - Bank Loans and Card Decks

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A deck contains three drawers. Drawer 1 contains two gold coins. Drawer 2 contains one gold coin and on silver coin. Drawer 3 contains two silver coins. I randomly choose a drawer and then randomly choose a coin. If a silver coin is chosen, what is the probability that I chose drawer 3?

A customer has approached a bank for a loan. Without further investigation, the bank believes there is a 4% chance that the customer will default on the loan. The bank can run a credit check on the customer. The check will yield either a favorable or unfavorable report. From past experience, the customer believes that P(favorable report being received) | customer will default) = 1/40, and P(favorable report |customer will not default) = 99/100. If a favorable report is received, what is the probability that the customer will default on the loan?

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Solution Summary

The solution determines probability for bank loans and card decks.

Solution provided by:
Changping Wang, MA
Education
  • BSc , Wuhan Univ. China
  • MA, Shandong Univ.
Recent Feedback
  • "Your solution, looks excellent. I recognize things from previous chapters. I have seen the standard deviation formula you used to get 5.154. I do understand the Central Limit Theorem needs the sample size (n) to be greater than 30, we have 100. I do understand the sample mean(s) of the population will follow a normal distribution, and that CLT states the sample mean of population is the population (mean), we have 143.74. But when and WHY do we use the standard deviation formula where you got 5.154. WHEN & Why use standard deviation of the sample mean. I don't understand, why don't we simply use the "100" I understand that standard deviation is the square root of variance. I do understand that the variance is the square of the differences of each sample data value minus the mean. But somehow, why not use 100, why use standard deviation of sample mean? Please help explain."
  • "excellent work"
  • "Thank you so much for all of your help!!! I will be posting another assignment. Please let me know (once posted), if the credits I'm offering is enough or you ! Thanks again!"
  • "Thank you"
  • "Thank you very much for your valuable time and assistance!"
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