According to the Mortgage Bankers Association, 11% of U.S. mortgages were delinquent last year. A delinquent mortgage is one that has missed at least one payment but has not yet gone to foreclosure. A random sample of eight mortgages was selected. What is the mean of this distribution?

Question

Quizplus · Accepted Answer

The mean of a binomial distribution is given by $n \times p$, where $n$ is the number of trials (in this case, 8 mortgages) and $p$ is the probability of success (in this case, the probability of a mortgage being delinquent, which is 11% or 0.11). Thus, the mean is $8 \times 0.11 = 0.88$. However, given the options provided, it seems there might be a mistake in the interpretation of the options or a typo in the question or answer choices. Based on the standard calculation, the answer closest to the calculated mean of 0.88 is A) 0.74, assuming a potential rounding or calculation error in the provided options.