SOLUTION: POISSON PROBABILITY DISTRIBUTION Question. According to the mortage bankers association of america, the foreclosure rate on mortages in 2001 was 1%, assuming that this rate is ap

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Question 931606: POISSON PROBABILITY DISTRIBUTION
Question.
According to the mortage bankers association of america, the foreclosure rate on mortages in 2001 was 1%, assuming that this rate is applicable to a community where 1000 homes have mortages, use the poisson approximation to the binomial distribution to determine the following for X= the number of foreclosures in this community during the coming year.
a)E(X) b) P(X=7) c) P(X=10)

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Answer by ewatrrr(24785) About Me  (Show Source):
You can put this solution on YOUR website!
a) E(X) = average = 10 .01%2A1000
.........
P(x = 7) = poissonpdf(10,7)= .09 0r 9%
.........
P(x = 10)= poissonpdf(10,10)= .1251 0r 12.51%
Using a TI calculator 0r similarly a Casio fx-115 ES plus (fast and easy way)
........
Recommend Using stattrek.com 0r Excel function to check Results
until You are familiar with Using Your calculator.