Municipal bond service in Country Avatar has three rating categories ( A , B , and C ).
Suppose that in the past year, of the municipal bonds issued, 60% were rated A , 25%
were rated B , and 15% were rated C . Of the municipal bonds rated A , 55% were
issued by cities, 40% by suburbs, and 5% by rural area. Of the municipal bonds rated
B , 70% were issued by cities, 15% by suburbs, and 15% by rural areas. Of the
municipal bonds rated C , 85% issued by cities, 10% by suburbs, and 5% by rural
areas.
What proportions of municipal bonds are issued by cities, suburbs, and rural areas,
respectively?
Municipal bond service in Country Avatar has three rating categories ( A , B , and C ).
Suppose that in the past year, of the municipal bonds issued, 60% were rated A , 25%
were rated B , and 15% were rated C . Of the municipal bonds rated A , 55% were
issued by cities, 40% by suburbs, and 5% by rural area. Of the municipal bonds rated
B , 70% were issued by cities, 15% by suburbs, and 15% by rural areas. Of the
municipal bonds rated C , 85% issued by cities, 10% by suburbs, and 5% by rural
areas.
If a new municipal bond is to be issued by a suburb, what is the probability that it
will be rated A ?
Assume random variable, X is distributed as a binomial distribution with n trials
and probability of success, p .
Write down the probability distribution function.
Assume random variable, X is distributed as a binomial distribution with n trials
and probability of success, p .
Interpret “expected value.”
Assume random variable, X is distributed as a binomial distribution with n trials
and probability of success, p .
Find the expected value of X , E(X ) = np .
A local pizza restaurant and a local branch of a national chain are located across the
street from a college campus. The local pizza restaurant advertises that they deliver to
the dormitories faster than the national chain. The delivery time of these two restaurants
are summarized as follows.
Explain “Type I Error.”
A local pizza restaurant and a local branch of a national chain are located across the
street from a college campus. The local pizza restaurant advertises that they deliver to
the dormitories faster than the national chain. The delivery time of these two restaurants
are summarized as follows.
Suppose X and Y are random variables defined on the same probability space. Also
suppose E(Y | X ) =α +βX , where α and β are constants. Use the law of iterated
expectations to prove that α = E(Y) −βE(X ) .
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