A Survey of Banks Revealed the Following Distribution for the Interest

question 9

Multiple Choice

A survey of banks revealed the following distribution for the interest rate being charged on a home loan (based on a 30-year mortgage with a 10% down payment) on a certain date in the past. $$\begin{array} { c | c | c | c | c | c } \text { Interest Rate } & \begin{array} { c } 3.20 \% \\\text { to } \\3.29 \%\end{array} & \begin{array} { c } 3.30 \% \\\text { to }\end{array} & \begin{array} { c } 3.40 \% \\\text { to } \\3.39 \%\end{array} & \begin{array} { c } 3.50 \% \\\text { to } \\3.59 \%\end{array} & \begin{array} { c } 3.60 \% \\\text { and } \\\text { above }\end{array} \\\hline \hline \text { Probability } & 0.12 & 0.23 & 0.24 & 0.35 & 0.06\end{array}$$ If a bank is selected at random from this distribution, what is the chance that the interest rate charged on a home loan will exceed 3.49%?

• A)0.06
• B)0.41
• C)0.59
• D)1.00

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Definitions:

Theory of Planned Behavior

A theory in psychology that forecasts a person's likelihood of performing a specific action at a given time and location, taking into account their attitudes, societal expectations, and their sense of control over the behavior.

Psychological Reactance

A motivational reaction to offers, persons, rules, or regulations that threaten or eliminate specific behavioral freedoms.

Resistance Effect

A phenomenon where individuals or groups oppose change or policies, often due to perceived threat to autonomy or norms.

Norm Discounting

The process by which individuals diminish the importance or relevance of norms in specific situations, often to justify their behavior.