## Related questions with answers

FDIC bank failures. The Federal Deposit Insurance Corporation (FDIC) normally insures deposits of up to $\$ 100,000$ in banks that are members of the Federal Reserve System against losses due to bank failure or theft. Over the last 10 years, the average number of bank failures per year among insured banks was 52 (FDIC Failed Bank List, 2016). Assume that $x$, the number of bank failures per year among insured banks, can be adequately characterized by a Poisson probability distribution with mean 52 . Find the expected value and standard deviation of $x$.

Solution

VerifiedGiven: Poisson probability distribution

$\lambda=52$

We need to determine the expected value and standard deviation of $x$.

The mean and variance of a Poisson distribution is given by $\lambda$.

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