Subprime Mortgages during the 2000–2008 Housing Bubble (Compare Exercise 28 in Section 7.2.) The following chart shows the (approximate) total number of subprime home mortgages in Florida in November 2008, broken down into four categories: 32 Mortgage Status Current Past Due In Foreclosure Repossessed Total Number 130,400 73,260 72,380 17,000 293,040 (The four categories are mutually exclusive; for instance, “Past Due” refers to a mortgage whose payment status is past due but is not in foreclosure, and “In Foreclosure” refers to a mortgage that is in the process of being foreclosed but not yet repossessed.) a. Find the probability that a randomly selected subprime mortgage in Florida during November 2008 was either in foreclosure or repossessed. [ HinT: See Example 1.] b. What is the probability that a randomly selected subprime mortgage in Florida during November 2008 was not repossessed?
Subprime Mortgages during the 2000–2008 Housing Bubble (Compare Exercise 28 in Section 7.2.) The following chart shows the (approximate) total number of subprime home mortgages in Florida in November 2008, broken down into four categories: 32 Mortgage Status Current Past Due In Foreclosure Repossessed Total Number 130,400 73,260 72,380 17,000 293,040 (The four categories are mutually exclusive; for instance, “Past Due” refers to a mortgage whose payment status is past due but is not in foreclosure, and “In Foreclosure” refers to a mortgage that is in the process of being foreclosed but not yet repossessed.) a. Find the probability that a randomly selected subprime mortgage in Florida during November 2008 was either in foreclosure or repossessed. [ HinT: See Example 1.] b. What is the probability that a randomly selected subprime mortgage in Florida during November 2008 was not repossessed?
Solution Summary: The author calculates the probability that a randomly subprime mortgage in Florida during 2008 was either in foreclosure or repossessed.
Subprime Mortgages during the 2000–2008 Housing Bubble (Compare Exercise 28 in Section 7.2.) The following chart shows the (approximate) total number of subprime home mortgages in Florida in November 2008, broken down into four categories:32
Mortgage Status
Current
Past Due
In Foreclosure
Repossessed
Total
Number
130,400
73,260
72,380
17,000
293,040
(The four categories are mutually exclusive; for instance, “Past Due” refers to a mortgage whose payment status is past due but is not in foreclosure, and “In Foreclosure” refers to a mortgage that is in the process of being foreclosed but not yet repossessed.)
a. Find the probability that a randomly selected subprime mortgage in Florida during November 2008 was either in foreclosure or repossessed. [HinT: See Example 1.]
b. What is the probability that a randomly selected subprime mortgage in Florida during November 2008 was not repossessed?
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