Answer:
D. 0.0384
Step-by-step explanation:
For each loan, there are only two possible outcomes. Either the client makes timely payments, or he does not. The probability of a client making a timely payment is independent from other clients. So we use the binomial probability distribution to solve this question.
However, our sample is big. So i am going to aproximate this binomial distribution to the normal.
Binomial probability distribution
Probability of exactly x sucesses on n repeated trials, with p probability.
Can be approximated to a normal distribution, using the expected value and the standard deviation.
The expected value of the binomial distribution is:
The standard deviation of the binomial distribution is:
Normal probability distribution
Problems of normally distributed samples can be solved using the z-score formula.
In a set with mean and standard deviation , the zscore of a measure X is given by:
The Z-score measures how many standard deviations the measure is from the mean. After finding the Z-score, we look at the z-score table and find the p-value associated with this z-score. This p-value is the probability that the value of the measure is smaller than X, that is, the percentile of X. Subtracting 1 by the pvalue, we get the probability that the value of the measure is greater than X.
When we are approximating a binomial distribution to a normal one, we have that , .
In this problem, we have that:
So
What is the probability that over 6% will not make timely payments?
This is 1 subtracted by the pvalue of Z when X = 0.06*300 = 18. So
has a pvalue of 0.9616
1 - 0.9616 = 0.0384
So the correct answer is:
D. 0.0384