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Management at a bank establishes a prior probability of .05 that any particular cardholder will default....

Management at a bank establishes a prior probability of .05 that any particular cardholder will default. The bank also found that the probability of missing a monthly payment of .20 for customers who do not default. of course, the probability of missing a monthly payment for those who default is 1. A) Given that a customer missed one or more monthly payments, compute the probability that the customer will default B) The bank would like to recall its card if the probability that customer will default is greater than .20. Should the bank recall its card if the customer misses a monthly payment? why or why not?

Math   Statistics-And-Probability   
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