A Bank Has Categorized Its Credit Card Accounts as High

question 5

Multiple Choice

A bank has categorized its credit card accounts as high risk or low risk.The overall default rate on all the bank's credit card accounts is 0.20.In the past,of the accounts that defaulted,50 percent were correctly identified by the bank as high risk.What is the default risk for a high-risk credit card account?

• A)0.50
• B)0.15
• C)0.40
• D)0.25
• E)There is not enough information to determine the answer.

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