A mortgage company has found that 2% of its mortgage holders default on their mortgage and lose their property. Furthermore, 90% of those who default are late on at least two monthly payments over the life of the mortgage as compared to 45% of those who do not default.


1.) What is the joint probability that a mortgagee has two or more late monthly payments and does not default on the mortgage?

2.) What is the joint probability that a mortgagee has one or less late monthly payments and does not default on the mortgage?

A mortgage holding company has found that 2% of its mortgage holders default on their mortgage and lose the property. Furthermore, 90% of those who default are late on at least two monthly payments over the life of their mortgage as compared to 45% of those who do not default.

What is the joint probability that a mortgagee has two or more late monthly payments and does not default on the mortgage?

What is the joint probability that a mortgagee has one or less late monthly payments and does not default on the mortgage?

Based on Bayes' Theorem, what is the probability that a mortgagee will not default given one or less payments over the life of the mortgage?

A mortgage holding company has found that 2% of its mortgage holders default on their mortgage and lose the property. Furthermore, 90% of those who default are late on at least two monthly payments over the life of their mortgage as compared to 45% of those who do not default.

What is the joint probability that a mortgagee has late monthly payments and does not default on the mortgage?

What is the joint probability that a mortgagee has monthly payments and default on the mortgage?

What is the joint probability that a mortgagee has one or less late monthly payments and does not default on the mortgage?

answer is P(D)=.02; therefore P(L>=2given that D)=.90 P(L<=1 given thatD)=.10
P(ND)=.98; therefore P(L>=2(ND)=.45 P(L<=1 given that ND) =.55

finishing my answer is P(ND P(L>=N conditional on ND)= .98*.45=.441

finishing my answer is P(ND P(L>=N conditional on ND)= .98*.45=.441

While the math is right, you're doing it for the wrong reason. The question is not asking for a conditional. It says "and" - an intersection. But .441 is the intersection not the conditional.