Question

a. P(B- N) P(A = N) d, Q4: The Small Business Association (SBA) is a govemment organization that supports entrepreneurs by essentially co-signing commercial loans made by banks. Lending money to small businesses is inherently risky given that approximately 50% of all small businesses fail within 5 years of their founding, often defaulting on their loans in the process. Currently, about 54% of all applications for SBA loans are approved. Of course, lenders do their best to only approve applications from those businesses that appear to be the most likely to succeed. Even so, the rate of failure is nontrivial: Among those businesses approved for an SBA loan, about 17% go on to fail within 5 years Letr.v. A represent whether a small business, loan application is approved. A = (Yes, No) Letr.v. F represent whether a small business fails within 5 years of its founding. F (Yes, No) Use the information provided to complete the contingency table below: (3 points) a. b. What is the probability that a business will succeed if it is approved for a loan? (2 points) What is the probability that a business will succeed if it is not approved for a loan? (2 points) c.

Answer 1

n: Oliven That, ㅝ40c ation (SBA) D, a Business Smal .Tu alf Smal busfnes hail D year 0-50 Por Sinio succu d Csmall busoss Them poz to 0. 0918

NOU 0-50 0 0913 8 nppouved) 2 = 0-5-0.4082. 0 513 completa th tabl 5-18% 46% u0 82 Y. 100 %

3 0.54 - 0.83 loan) 0 /26