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A municipal bond service has three rating categories (A, B, and C). Suppose that of the municipal bonds issued throughout the United States in the past year, 70% were rated A, 20% were rated B, and 10% were rated C. Of the municipal bonds rated A, 5 were issued by cities, 40% by suburbs, and 10% by rural areas. Of the municipal bonds rated B, 60% were issued by cities, 20 by suburbs, and 20% by rural areas. Of the municipal bonds rated C, 90% were issued by cities, 5% by suburbs, and 5% by rural areas. a. If a new municipal bond is to be issued by a city, what is the probability that it will receive an A rating? b. What proportion of municipal bonds are issued by cities? c. What proportion of municipal bonds are issued by suburbs?

A municipal bond service has three rating categories (A, B, and C). Suppose that of the municipal bonds issued throughout the United States in the past year, 70% were rated A, 20% were rated B, and 10% were rated C. Of the municipal bonds rated A, 5 were issued by cities, 40% by suburbs, and 10% by rural areas. Of the municipal bonds rated B, 60% were issued by cities, 20 by suburbs, and 20% by rural areas. Of the municipal bonds rated C, 90% were issued by cities, 5% by suburbs, and 5% by rural areas. a. If a new municipal bond is to be issued by a city, what is the probability that it will receive an A rating? b. What proportion of municipal bonds are issued by cities? c. What proportion of municipal bonds are issued by suburbs?

Linear Algebra: A Modern Introduction
Linear Algebra: A Modern Introduction
4th Edition
ISBN:9781285463247
Author:David Poole
Publisher:David Poole
Chapter2: Systems Of Linear Equations
Section2.4: Applications
Problem 28EQ
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Is this correct? Am I looking at this correctly or should I use a ph stat formula?
Calibri (Body) - A A Aav Ao v12 AaBbCcDd AaBbCcDd AaBbC AABBCCC AaB AaB BIUV ab x, x A - er A v 三。 v出、 1 Normal 1 No Spac. Heading 1 Heading 2 Title Su baragranh Stules AutoSave On Homework 3 - Saved - O Search Lan Pratt File Home Insert Draw Page Layout Formulas Data Review View Help PHStat 11 - A A E Conditional Formatting Calibri General 密Insert Paste $ • % 9 Format as Table X Delete v BIU 三三州国 園 Z Cell Styles v EFormat v Clipboard Font Alignment Number Styles Cells G9 fr A В C F G H. J K A municipal bond service has three rating categories (A, B, and C). Suppose that of the municipal bonds issued throughout the United States in the past year, 70% were rated A, 20% were rated B, and 10% were rated C. Of the municipal bonds rated A, 50% were issued by cities, 40% by suburbs, and 10% by rural areas. Of the municipal bonds rated B, 60% were issued by cities, 20% by suburbs, and 20% by rural areas. Of the municipal bonds rated C, 90% were issued by cities, 5% by suburbs, and 5% by rural areas. 3 a. If a new municipal bond is to be issued by a city, what is the probability that it will receive an A rating? 4 b. What proportion of municipal bonds are issued by cities? 5 c. What proportion of municipal bonds are issued by suburbs? 50% 67% 22% 7 Cities subarbs rural 40% 10% 8 Rating A 9 Rating B 10 Rating C 11 12 70% 50% 20% 60% 20% 20% 10% 90% 5% 5% 200% 65% 35% 4.48 nuBasic Probabilities Sheet1 Sheet2 nuBasic Probabilities 4.48 Ready > > > WEO
Transcribed Image Text:Calibri (Body) - A A Aav Ao v12 AaBbCcDd AaBbCcDd AaBbC AABBCCC AaB AaB BIUV ab x, x A - er A v 三。 v出、 1 Normal 1 No Spac. Heading 1 Heading 2 Title Su baragranh Stules AutoSave On Homework 3 - Saved - O Search Lan Pratt File Home Insert Draw Page Layout Formulas Data Review View Help PHStat 11 - A A E Conditional Formatting Calibri General 密Insert Paste $ • % 9 Format as Table X Delete v BIU 三三州国 園 Z Cell Styles v EFormat v Clipboard Font Alignment Number Styles Cells G9 fr A В C F G H. J K A municipal bond service has three rating categories (A, B, and C). Suppose that of the municipal bonds issued throughout the United States in the past year, 70% were rated A, 20% were rated B, and 10% were rated C. Of the municipal bonds rated A, 50% were issued by cities, 40% by suburbs, and 10% by rural areas. Of the municipal bonds rated B, 60% were issued by cities, 20% by suburbs, and 20% by rural areas. Of the municipal bonds rated C, 90% were issued by cities, 5% by suburbs, and 5% by rural areas. 3 a. If a new municipal bond is to be issued by a city, what is the probability that it will receive an A rating? 4 b. What proportion of municipal bonds are issued by cities? 5 c. What proportion of municipal bonds are issued by suburbs? 50% 67% 22% 7 Cities subarbs rural 40% 10% 8 Rating A 9 Rating B 10 Rating C 11 12 70% 50% 20% 60% 20% 20% 10% 90% 5% 5% 200% 65% 35% 4.48 nuBasic Probabilities Sheet1 Sheet2 nuBasic Probabilities 4.48 Ready > > > WEO
QMB-500 Week 3 Homework - Saved - Search put References Mailings Review View Help A A Aa A 三、三、行 EE T AaBbCcDd AaBbCcDd AABBCC AABBCCC A aB AaBbCcD AaBbCcDc 1 Normal 1 No Spac. Heading 1 Heading 2 Title Subtitle Subtle Em Paragraph Styles 4.48 A municipal bond service has three rating categories (A, B, and C). Suppose that of the municipal bonds issued throughout the United States in the past year, 70% were rated A, 20% were rated B, and 10% were rated C. Of the municipal bonds rated A, 5 were issued by cities, 40% by suburbs, and 10% by rural areas. Of the municipal bonds rated B, 60% were issued by cities, 20 by suburbs, and 20% by rural areas. Of the municipal bonds rated C, 90% were issued by cities, 5% by suburbs, and 5% by rural areas. a. If a new municipal bond is to be issued by a city, what is the probability that it will receive an A rating? b. What proportion of municipal bonds are issued by cities? c. What proportion of municipal bonds are issued by suburbs? 4.53
Transcribed Image Text:QMB-500 Week 3 Homework - Saved - Search put References Mailings Review View Help A A Aa A 三、三、行 EE T AaBbCcDd AaBbCcDd AABBCC AABBCCC A aB AaBbCcD AaBbCcDc 1 Normal 1 No Spac. Heading 1 Heading 2 Title Subtitle Subtle Em Paragraph Styles 4.48 A municipal bond service has three rating categories (A, B, and C). Suppose that of the municipal bonds issued throughout the United States in the past year, 70% were rated A, 20% were rated B, and 10% were rated C. Of the municipal bonds rated A, 5 were issued by cities, 40% by suburbs, and 10% by rural areas. Of the municipal bonds rated B, 60% were issued by cities, 20 by suburbs, and 20% by rural areas. Of the municipal bonds rated C, 90% were issued by cities, 5% by suburbs, and 5% by rural areas. a. If a new municipal bond is to be issued by a city, what is the probability that it will receive an A rating? b. What proportion of municipal bonds are issued by cities? c. What proportion of municipal bonds are issued by suburbs? 4.53
Expert Solution
Step 1

Given:

A rated 70% of 100=70

B rated 20% of 100=20

C rated 20% of 100=20

From A, 50% for cities      >>50% of 70=35

From A, 40% for suburbs >>40% of 70=28

From A, 10% for rural      >>10% of 70=7

 

From B, 60% for cities      >>60% of 20=12

From B, 20% for suburbs >>20% of 20=4

From B, 20% for rural      >>20% of 20=4

 

From C, 90% for cities      >>90% of 10=9

From C, 5% for suburbs >>5% of 10=0.5

From C, 5% for rural      >>5% of 10=0.5

 

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