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    cowboy's Avatar
    cowboy Posts: 1, Reputation: 1
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    #1

    Nov 30, 2005, 12:58 PM
    Statistics and Joint Probability
    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?
    sujan's Avatar
    sujan Posts: 1, Reputation: 1
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    #2

    Mar 28, 2006, 11:38 PM
    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?
    norkong's Avatar
    norkong Posts: 1, Reputation: 1
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    #3

    Nov 29, 2009, 04:44 AM
    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?
    Moriums's Avatar
    Moriums Posts: 1, Reputation: 1
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    #4

    Feb 5, 2010, 07:51 PM

    What is the joint probability that a mortgagee has one or less late monthly payments and does not default on the mortgage?
    janie10's Avatar
    janie10 Posts: 2, Reputation: 1
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    #5

    Mar 5, 2010, 09:15 AM
    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
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    janie10 Posts: 2, Reputation: 1
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    #6

    Mar 5, 2010, 09:25 AM

    finishing my answer is P(ND P(L>=N conditional on ND)= .98*.45=.441
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    morgaine300 Posts: 6,561, Reputation: 276
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    #7

    Mar 5, 2010, 09:15 PM
    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.
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