Subprime Mortgages during the 2000–2008 Housing Bubble The following chart shows the results of a survey of the status of subprime home mortgages in Florida in November 2008:14
Mortgage Status | Current | Past Due | In Foreclosure | Repossessed |
Frequency | 110 | 65 | 60 | 15 |
(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 relative frequency distribution for the experiment of randomly selecting a subprime mortgage in Florida and determining its status.
b. What is the relative frequency that a randomly selected subprime mortgage in Florida was neither in foreclosure nor repossessed? [HinT: See Example 2.]
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