24_DiscussionQuestions0

# 24_DiscussionQuestions0 - ACCY 302(Chen Class 24 Fall 2009...

This preview shows pages 1–3. Sign up to view the full content.

ACCY 302 (Chen) Class 24 Fall 2009 Pilgrim Bank (A): Customer Profitability 1) Suppose that Pilgrim Bank has the following sample data about the number of men and the number of women who use only on-line banking and who use only branch banking. Number of On-Line Bankers Number of Branch Bankers Total Men 288 672 960 Women 36 204 240 Total 324 876 1,200 a) Using the joint probability table below, compute the probability that a given customer chosen from the 1,200 in the sample will be: both a man and an on-line banker both a man and a branch banker both a woman and an on-line banker both a woman and a branch banker an on-line banker a man a branch banker a woman On-Line Banker Branch Banker Total Man Woman Total 1.0 b) Compute the following conditional probabilities. i) The probability that the customer is an on-line banker, given that the customer is a man. ii) The probability that the customer is an on-line banker, given that the customer is a woman. iii) Taken together, what do these two conditional probabilities suggest? Page 1 of 6

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
ACCY 302 (Chen) Class 24 Fall 2009 2) Suppose that Pilgrim Bank is reviewing its credit card policy with a view toward recalling some of its credit cards. In the past, approximately 5% of Pilgrim’s cardholders have defaulted and the bank has been unable to collect the outstanding balance. Management would like to institute a policy in which a customer’s card is recalled if the probability that the customer will default is greater than 0.20. To help determine if this is a reasonable cutoff, management has determined that the probability of missing one or more monthly payments for those customers who do not default is 0.20. (adapted from Anderson Sweeney and Williams 8e) a) Determine the following probabilities: P(default) = should sum to 1.0 P(no default) = P(missed payment | default) = should sum to 1.0 P(no missed payment | default) = P(missed payment | no default) =
This is the end of the preview. Sign up to access the rest of the document.

## This note was uploaded on 11/08/2011 for the course ACCY 302 taught by Professor Staff during the Spring '08 term at University of Illinois, Urbana Champaign.

### Page1 / 6

24_DiscussionQuestions0 - ACCY 302(Chen Class 24 Fall 2009...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online