On many online lending platforms, you’ll often see that the loans are assigned different letter grades such as A, B, C, etc. What do these grades mean?
Added by Brent W.
Step 1
) represent the creditworthiness of borrowers on online lending platforms. Show more…
Show all steps
Close
Your feedback will help us improve your experience
Madhur L and 51 other Intro Stats / AP Statistics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
On a peer-to-peer (P2P) lending website, borrowers assess creditworthiness. Borrowers are rated on a approval rating scale, with A having the highest scores and D having the lowest; A, B, C, or D, based on their scores. In a large sample of borrowers, 31% were rated D. Suppose the scores are normally distributed with a mean of 320 and a standard deviation of 6. Round numeric answers to the nearest integer: a) What is the cut-off score between A and B? b) What is the cut-off score between B and C? c) What is the cut-off score between C and D? d) What score corresponds to the 90th percentile? e) What score corresponds to the 25th percentile? f) What is the minimum score above which lies 17% of the scores? g) Between which scores will the middle 58% of scores lie? h) What rating will a score of 356 receive? i) What rating will a score of 267 receive?
Madhur L.
On a peer-to-peer (P2P) lending website, borrowers complete an approval scoring form that lenders use to assess creditworthiness. Borrowers are rated A, B, C or D, based on their scores, with A having the highest scores and D having the lowest. In a large sample of borrowers, 24% were rated A, 32% were rated B, 17% were rated C, and the rest were rated D. Suppose the scores are normally distributed with a mean of 321 and a standard deviation of 39. Round numeric answers to the nearest integer. a) What is the cut-off score between A and B? b) What is the cut-off score between B and C? c) What is the cut-off score between C and D? d) What score corresponds to the 10th percentile? e) What score corresponds to the 60th percentile? f) What is the minimum score above which lies 19% of the scores? g) Between what scores will the middle 96% of scores lie? Lower value = Higher value = h) What rating will a score of 305 receive? Select an answer i) What rating will a score of 294 receive? Select an answer
Shelayah R.
At the website Lending Club, customers can either borrow money or fund money for others' loans. Access the data about the loans funded at Lending Club in September 2014, which are available at MyMathLab and at the Pearson Downloadable Student Resources for Math & Stats website. a. Construct a relative frequency histogram of the loan amounts for those who rent their home, beginning with a lower class limit of 0 dollars and a class width of 5000 dollars. Do the same for those who own their home. Also, do the same for those who have a mortgage on a home. b. For each of the three distributions described in part (a), determine the shape. c. For each of the three distributions, determine whether the mean or the median is the better measure of the center. Explain. d. For each of the three distributions, find the mean and median. e. For each of the three distributions, which is larger, the mean or the median? How does this relate to your response to part (b)? f. Compare the medians for the three distributions. What does your comparison mean in this situation? In your opinion, why does this make sense?
Sheryl E.
Recommended Textbooks
Elementary Statistics a Step by Step Approach
The Practice of Statistics for AP
Introductory Statistics
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD