I have a hard time with a probability question, can someone help?
Assume there are n identical banks. Each bank has a probability of 0.5 to go bankrupt after one time period.
If presumably more than x banks go bankrupt, all banks are saved by the government. Obviously, x < n.
I have all my money at one bank. What is the probability of it going bankrupt?
Does anyone have an answer? Guess it has something to do with the cumulative binomail distribution in order to calculate the probability that banks actually go bankrupt... or is it?