4.77 Loan officer decision.
Considering the information provided in the previous exercise, calculate . Show your work. Also, express this probability in words in the context of the loan officer's decision. If new information about the customer becomes available before the loan officer makes her decision, and if this information indicates that there is only a 25% chance that this customer will overdraw his account rather than a 40% chance, how does this change ?
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4.77
Given that the customer defaults on the loan, there is an 89.89% chance that the customer has overdrawn an account. If the chance that this customer will overdraw his account is 25%,