Question

A bank classifies its customer into two classes “fraud” and “normal” based on their installment payment behavior. We know that the probability of a customer being being fraud is P(fraud) = 0.20, the probability of customer defaulting installment payment is P(default) = 0.40, and the probability that a fraud customer defaults in installment payment is P(default|fraud) = 0.80. What is the probability of a customer who defaults in payment being a fraud?

A.  0.80

 

B.  0.60

 

C.  0.40

 

D.  0.20

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Answer 1

B. 0.60

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