Lesson 6.5 Name_________________________

Independence Hour_____

Independent Event -

Dependent Event -

A large lending institution issues both adjustable-rate and fixed-rate mortgage loans on residential property, which it classifies into three categories: single-family houses, condominium and multifamily dwellings. The following table, sometimes called a joint probability table, displays probabilities based on the bank’s long-run lending behavior.

	Single-family	Condo	Multifamily	Total
Adjustable	.40	.21	.09	.70
Fixed	.10	.09	.11	.30
Total	.50	.30	.20	1.00

Let E = event that a mortgage has an adjustable rate.

F = event that a mortgage is for a single-family property

Then

Let C = event that a mortgage is for a condo.

Independent Events
Dependent Events