A Survey of Banks Revealed the Following Distribution for the Interest

question 60

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) . $$\begin{array} { | c | c | c | c | c | c | } \hline \text { Interest Rate } & \begin{array} { c } 4.90 \% \text { to } \\4.99 \%\end{array} & \begin{array} { c } 5.00 \% \text { to } \\5.09 \%\end{array} & \begin{array} { c } 5.10 \% \text { to } \\5.19 \%\end{array} & \begin{array} { c } 5.20 \% \text { to } \\5.29 \%\end{array} & \begin{array} { c } 5.30 \% \text { and } \\\text { above }\end{array} \\\hline \text { Probability } & 0.12 & 0.23 & 0.24 & 0.35 & 0.06 \\\hline\end{array}$$
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 5.19%?

• A) 0.06
• B) 0.41
• C) 0.59
• D) 1.00

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Definitions:

Distribution Channel

Path through which products—and legal ownership of them—flow from producer to consumers or business users.

Market Intermediaries

Businesses or individuals that act as a middleman in the distribution process, facilitating transactions between producers and consumers.

Business-To-Business (B2B)

Describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or a wholesaler and a retailer.