You are applying for a home loan. You have the choice between a fixed interest rate of 5% or a...
wagnafjw01You are applying for a home loan. You have the choice between a fixed interest rate of 5% or a variable interest rate. For the variable rate, consider the probability distribution of 10% chance for a 1% interest rate, a 30% chance for a 4.5% interest rate, a 55% chance for a 7% interest rate, and a 5% chance for a 12% interest rate. If you were to graph this distribution, which component of central tendency and dispersion measures best summarizes the distribution? Why?
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