The loan amounts of loans originated by a large insurance company lender have a mean of $6.74 million with a standard deviation of $15.37 million.  The variable “loan amount” is known to have a right-skewed distribution. a) Using units of millions of dollars, determine the sampling distribution of the sample mean for samples of size 200. Interpret your result. b) Repeat part (a) for samples of size 600. c) Why can you still answer parts (a) and (b) when the distribution of loan amounts is not normal, but rather right-skewed?

Question

4) The loan amounts of loans originated by a large insurance company lender have a mean of $6.74 million with a standard deviation of $15.37 million.  The variable “loan amount” is known to have a right-skewed distribution.

  1. a) Using units of millions of dollars, determine the sampling distribution of the sample mean for samples of size 200. Interpret your result.
  2. b) Repeat part (a) for samples of size 600.
  3. c) Why can you still answer parts (a) and (b) when the distribution of loan amounts is not normal, but rather right-skewed?

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