00:02
All right.
00:05
So traveling to hawaii where the bank of y says 7 % of its credit card holders default at some point in their life.
00:16
They just made up 12 new cards today.
00:18
So how many of these new card holders would we expect to defaults and with that same deviation? so it's binomial.
00:25
This is a binomial situation because you could have you could default or not.
00:29
And the clearly defined number of defaults we're looking for, and the impact of one person defaulting would not impact the other person defaulting or anyone else.
00:49
So we're assuming that.
00:50
So it's a binomial experiment.
00:51
So the mean would be n times pi, pi being the probability.
01:00
So n is 12, so 12 times probability, 0 .07.
01:05
So we'd expect, i know it sounds weird, but we'd expect 0 .84.
01:11
So we could expect maybe one person out of the 12 if you would round up.
01:18
And standard deviation, so that's mu.
01:22
The standard deviation is the square root of the variance, which is given as n times pi times the complement of pi.
01:29
So, and that's pi the probability, not pi, the number pi, as in the circumference divided by the standard, not that thing...