As the End of the Year 1999 Approached, Many People

question 55

Essay

As the end of the year 1999 approached, many people worried that banks and more specifically the banks' computers would not be able to read the year 2000 correctly. This was commonly known as the Y2K problem. Many people were concerned that their bank would lose the record of their deposits etc., and made plans to take most of their funds out of the bank. Address the potential Y2K problem from the standpoint of bank risk. What two types of risk potentially could have been involved?

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Definitions:

Sampling Distribution

The probability distribution of a given random-sample-based statistic, used to make inferences about a population.

Mean

The arithmetic average of a set of numbers, calculated by adding all the values together and dividing by the number of values.

Number of Successes

This term refers to the count of times an outcome of interest occurs in a statistical experiment.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values.