A bank offers both adjustable and fixed rate mortgage loans on residential properties, which are classified into three categories: single-family homes, condominiums, and multi-family homes. Each loan made in 2010 was classified according to type of mortgage and type of property, as shown in the given table.
Single Family Condo Multi Family
Adjustable 1500 788 337
Fixed Rate 375 377 373
Answer the following: (Express answers as fractions or to 4 decimal places) a) What is the probability that a randomly chosen loan was for a condo? b) What is the probability that a randomly chosen loan was for a fixed rate, given that is was on a single family home? c) What is the probability that a randomly chosen loan was for a multi family home, given that it was an adjustable rate loan?
a)probability that a randomly chosen loan was for a condo =1165/3750 =0.3107
b) probability that a randomly chosen loan was for a fixed rate, given that is was on a single family home
=375/1875=0.2
c)
probability that a randomly chosen loan was for a multi family home, given that it was an adjustable rate loan=337/2625=0.1284
A bank offers both adjustable and fixed rate mortgage loans on residential properties, which are classified...
A large lending institution issues both adjustable-rate and fixed-rate mortgage loans on residential property, which it classifies into three categories: single-family houses, condominiums, and multi-family dwellings. The following table displays probabilities based on the bank’s long-run lending behavior: Mortgage Choices Single-Family Condo Multi-Family Adjustable-Rate _____ ? .21 .09 Fixed-Rate .1 .09 .11 What is the probability that a randomly selected customer will have a loan with an adjustable-rate or for a multi-family dwelling? Round your answer to 2 decimal places.