Historically, the Default Rate on a Certain Type of Commercial

question 8

Multiple Choice

Historically, the default rate on a certain type of commercial loan is 20 percent. If a bank makes 100 of these loans, what is the approximate probability that at least 26 will result in default?

• A)0.2000
• B)0.0668
• C)0.0846
• D)0.0336

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Definitions:

Seriation

The cognitive ability to arrange objects in an order according to size, shape, or any other characteristic, which is a key aspect of logical thinking in children.

Long-Term Memory

The aspect of memory concerned with the storage of information over an extended period, potentially for a lifetime.

Memory Ability

The capacity of the brain to store, retain, and recall information and past experiences.

Intelligence

Cognitive capability involving learning, reasoning, problem-solving, and adaptation.