Probability and Standard deviation
I have this word problem - I need help in formula and answer. How do I know which formula to use?
The Bank of Hawaii reports that 7 percent of its credit card holders will default at some time in their life. The Hilo branch just mailed out 12 new cards today
A. How many of theese new cardholders would you expect to default? What is the standard deviation?
first part - is this a simple 7/12?
B. What is the likelihood that none of the cardholders will default?
C. What is the likelihood that at least one will default?
Re: Probability and Standard deviation
If you assume that this is a random sample, then the probability will match that of a random sample. Now if I have 12 people and I want to take 7%, what do I have to multiply this by to get 7% of 12? (Hint: What is the equivalent fraction of 7% in terms x/100)?
I will give you a hint for the other two: you need to use a binomial distribution to calculate these quantities.