A Large Bank in a Metropolitan Area Has a Large

question 53

Short Answer

A large bank in a metropolitan area has a large number of secured loans on apartment facilities throughout the area.Local economic indicators suggest the percentage of vacant apartments ranges from 7% to 10%.Concerned about the borrowers' ability to meet loan obligations on time the bank decides to sample from the apartments used to secure loans.The officer responsible for the sample decides to allow a maximum error of the estimate of 0.01 with 99 percent confidence.The officer wishes to take a sample large enough to cover all proportions within the estimated vacancy range.Compute the sample size needed for this study.

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Definitions:

Assets

Resources owned by a company that have economic value and can be used to meet liabilities.

Internal Auditors

Professionals who conduct audits within an organization to review and evaluate the adequacy of internal controls and compliance with policies and regulations.

Evaluate

To Evaluate means to systematically assess something by considering its merits, qualities, or values, usually in a detailed and analytical manner.

Internal Controls

Steps and guidelines set by a business to secure the trustworthiness of its financial and accounting information, promote ethical accountability, and inhibit fraud.