A person applies for a loan of ₹1,00,000. The bank informed him that over the years, it had received…
For a binomial distribution with n = 2,920 independent loan applications per year and an average probability of approval p = 0.85, the expected (average) number of loans…
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A person applies for a loan of ₹1,00,000. The bank informed him that over the years, it had received 2920 loan applications per year and the probability of approval was, on an average 0.85. The applicant wants to know the average number of loans approved per year by the bank. What can be that number?
Answer and explanation
Correct answer D
For a binomial distribution with n = 2,920 independent loan applications per year and an average probability of approval p = 0.85, the expected (average) number of loans approved per year is given by the mean E(X) = n * p = 2,920 * 0.85 = 2,482.
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UGC NET Commerce