An individuals credit score is a number calculated basedon that persons credit history

Chapter 4, Problem 127

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An individuals credit score is a number calculated basedon that persons credit history that helps a lender determinehow much he/she should be loaned or what creditlimit should be established for a credit card. An article inthe LosAngeles Times gave data which suggested that abeta distribution with parameters A 5 150, B 5 850,a 5 8, b 5 2 would provide a reasonable approximationto the distribution of American credit scores. [Note:credit scores are integer-valued].a. Let X represent a randomly selected American creditscore. What are the mean value and standard deviationof this random variable? What is the probability that Xis within 1 standard deviation of its mean value?b. What is the approximate probability that a randomlyselected score will exceed 750 (which lenders considera very good score)?

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