Exercise 4. Bank earnings standard error
What is the standard error of \(S\)?
This exercise is part of the course
HarvardX Data Science - Probability (PH125.3x)
Exercise instructions
- Compute the standard error of the random variable
Syou generated in the previous exercise, the summed outcomes of 10,000 loans.
Hands-on interactive exercise
Have a go at this exercise by completing this sample code.
# Assign the number of loans to the variable `n`
n <- 10000
# Assign the loss per foreclosure to the variable `loss_per_foreclosure`
loss_per_foreclosure <- -200000
# Assign the probability of default to the variable `p_default`
p_default <- 0.03
# Compute the standard error of the sum of 10,000 loans