A local bank reviewed its credit card policy with the intention of recalling some of its...
A local bank reviewed its credit card policy with the intention of recalling some of its credit cards. in the past 5% of cardholders defaulted, leaving the bank unable to collect the outstanding balance. Hence managment established a prior probability of .05 that any particular cardholder will default. The bank also found that the probability of missing a monthly payment is.20 for customers who do not default.of course the probality of missing a monthly payment for those who default is 1.
A) givien a customer missed a monthly payment , compute the posterior probability that the customer will default?
B) the bank would like to recallits credit card i the probability that a customer will default is greater than .20. should the bank recall its card if the customer misses a payment? why or why not?
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A local bank reviewed its credit card policy with the intention of recalling some of its...
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A bank recently announced an "instant cash" plan for holders of its bank credit cards. A cardholder may receive cash from the bank up to a preset limit (about $500). There is a special charge of the minimum of $15 or 4% made at the time the "instant cash" is sent to the cardholders. Each month the bank charges 11% on the unpaid balance. The monthly payment, including interest, may be as little as $10. Assume the cardholder makes the...
a. predicit the probability a card holder who charged 31k does
not have a credit card will purch a premium card.
b. predicit prob of card holder w/ 31k and HAS a credit card
will ourch a premium card.
c. predicit the prob of card holder with 15.5k that does NOT
have a credit card to purch a premium.
The marketing department for a credit card company wants to determine which of its existing standard credit pard holders should be...
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