Probability!! 2

Question

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2. You have $10,000 to invest. After some investigating, you found two investment opportunities. Bond A has a return of 6.5% with a default rate of 2%. Bond B has a return of 8% with a default rate of 4%. Find the value of return and decide which bond would be a better investment.

 

3. Your statistics instructor will give you a quiz next class. The quiz has 10 questions, each with 4 choices (a, b, c, or d). You feel tired and do not study and decide to guess all the answers. What is the probability of passing this quiz? (Assume a passing grade is 7 correct questions)

 

4. If a distribution follow the binomial distribution with n=45 and probability of success of 0.78, find the mean and variance.

 

5. A brand has a recognition rate of 85%. If the corporate office wants to verify this rate with a sample of 30 randomly selected customers, find the probability that exactly 26 people recognize the brand name.

Answer 1

4 n=45 p=.78 q = 1-p = .22

mean = np = 45(.78) = 35.1

variance = npq = 35.1(.22) = 7.722