The following chart shows the (approximate) total number of subprime home mortgages in a state in November 2008, broken down into four categories. (The four categories are mutually exclusive; for instance, "Past Due" refers to a mortgage whose payment status is past due but is not in foreclosure, and "In Foreclosure" refers to a mortgage that is in the process of being foreclosed but not yet repossessed.) (a)Find the probability that a randomly selected subprime mortgage in the state during November 2008 was neither in foreclosure nor repossessed. (b) What is the probability that a randomly selected subprime mortgage in the state during November 2008 was not current?

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The following chart shows the (approximate) total number of subprime home mortgages in a state in November 2008, broken down into four categories. (The four categories are mutually exclusive; for instance, "Past Due" refers to a mortgage whose payment status is past due but is not in foreclosure, and "In Foreclosure" refers to a mortgage that is in the process of being foreclosed but not yet repossessed.) (a)Find the probability that a randomly selected subprime mortgage in the state during November 2008 was neither in foreclosure nor repossessed. (b) What is the probability that a randomly selected subprime mortgage in the state during November 2008 was not current?
Mortgage
Status
Past
In
Current
Repossessed
Total
Due
Foreclosure
Number
196,330
51,310
8,050
5,390
261,080
Transcribed Image Text:Mortgage Status Past In Current Repossessed Total Due Foreclosure Number 196,330 51,310 8,050 5,390 261,080
Expert Solution
Step 1

a) There are total 261,080 mortgages. Among them (8050+5390)=13440 are in foreclosure or repossessed.This means (261080-13440)=247640 were neither in foreclosure nor repossessed.So the required probability is=247640261080=61916527=0.948521525969

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