sampling distibution

• May 27th 2010, 08:07 PM
mambakilla
sampling distibution
can anyone help me with understanding how to do this problem.

based on past experience a bank believes 12% of people who receive loans do not pay on time. The bank recently approved 400 new loans.

what is the mean and standard deviation of the proportion of clients who may not pay on time?

what is the probability that over 14% of these clients will not make timely payments?
• May 27th 2010, 08:50 PM
mr fantastic
Quote:

Originally Posted by mambakilla
can anyone help me with understanding how to do this problem.

based on past experience a bank believes 12% of people who receive loans do not pay on time. The bank recently approved 400 new loans.

what is the mean and standard deviation of the proportion of clients who may not pay on time?

what is the probability that over 14% of these clients will not make timely payments?

X ~ Binomial(n = 400, p = 0.12).

For the second part, you're probably expected to use the the normal approximation to the Binomial distribution. Note: 14% of 400 = 56.