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The Stripes C-Store Chain

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The Stripes C-store chain reports that 7% of its credit card holders will default within 5 years. It just mailed out 12 new cards today.
a.How many of these new cardholders would be expected to default within 5 years? What is the standard deviation?
b.What is the likelihood that none of these cardholders will default?
c.What is the likelihood that at least one will default?

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The Stripes C-store chain reports that 7 % of its credit card holders will default within 5 years. It just mailed out 12 new cards today.

p = 7%
n = 12
q = 1-p = ...

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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