Suppose 5% of the Population Have a Certain Disease

question 15

Multiple Choice

Suppose 5% of the population have a certain disease.A laboratory blood test gives a positive reading for 95% of people who have the disease.What is the probability of testing positive and having the disease?

• A)0.0475
• B)0.95
• C)0.05
• D)0.9
• E)0.02

---

Definitions:

Commercial Banks

Financial institutions that accept deposits, offer various loans, and provide other financial services to individuals and businesses.

Reserves

Typically refers to deposits that banks hold at the central bank plus the cash in vaults, or to the quantities of a resource (like oil or gold) that are known to be available.

Cash

Money in the form of notes and coins, representing immediate purchasing power and liquidity.

Bank Vaults

Secure rooms where banks and other financial institutions store money, valuable documents, and other assets.