The chief loan officer of La Crosse Home Mortgage Company summarized the housing loans extended by the company in 2010 according to type and term of the loan. Her list shows that 65% of the loans werefixed-rate mortgages (F), 26% were adjustable-rate mortgages (A), and 9% belong to some other category (0) (mostly second trust-deed loans and loans extended under the graduated payment plan). Of thefixed-rate mortgages, 41% were 30-year loans, and 59% were 15-year loans; of the adjustable-rate mortgages, 28% were 30-year loans and 72% were 15-year loans; finally, of the other loans, extended, 30%were 20-year loans, 64% were 10-year loans, and 6% were for a term of 5 years or less.(a) Draw a tree diagram representing these data.20<=515301530153015301020 <=510 20 = 5 10 20 <=5 15 3015301020<=51530(b) What is the probability that a home loan extended by La Crosse has an adjustable rate and is for a term of 15 years? (Round your answer to four decimal places.)(c) What is the probability that a home loan extended by La Crosse is for a term of 15 years? (Round your answer to four decimal places.)

(a) The tree diagram (b) represents the correct answer.

Answered: The chief loan officer of La Crosse…

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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The chief loan officer of La Crosse Home Mortgage Company summarized the housing loans extended by the company in 2017 according to type and term of the loan. Her list shows that 60% of the loans were fixed-rate mortgages (F), 30%were adjustable-rate mortgages (A), and 10% belong to some other category (O) (mostly second trust-deed loans and home equity loans). Of the fixed-rate mortgages, 75% were 30-year loans and 25% were 15-year loans; of the adjustable-rate mortgages, 30% were 30-year loans and 70% were 15-year loans; finally, of the other loans extended, 25% were 20-year loans, 60% were 10-year loans, and 15% were for a term of 5 years or less. What is the probability that a home loan extended by La Crosse has an adjustable rate and is for a term of 15 years? What is the probability that a home loan extended by La Crosse is for a term of 15 years?
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