A Company Is Considering Producing Some New Gameboy Electronic Games

question 135

Multiple Choice

A company is considering producing some new Gameboy electronic games.Based on past records,management believes that there is a 70 percent chance that each of these will be successful and a 30 percent chance of failure.Market research may be used to revise these probabilities.In the past,the successful products were predicted to be successful based on market research 90 percent of the time.However,for products that failed,the market research predicted these would be successes 20 percent of the time.If market research is performed for a new product,what is the probability that the results indicate a successful market for the product and the product is actually not successful?

• A)0.63
• B)0.06
• C)0.07
• D)0.24
• E)0.27

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Definitions:

Buyer's Bank

The financial institution that represents a buyer in transactions, ensuring payment to the seller under agreed conditions.

Cashier's Check

A check issued by a bank and drawn from its own funds rather than those of a personal account, typically used for significant transactions where guaranteed funds are required.

Trade Acceptance

A draft that is drawn by a seller of goods ordering the buyer to pay a specified sum of money to the seller, usually at a stated time in the future. The buyer accepts the draft by signing the face of the draft, thus creating an enforceable obligation to pay the draft when it comes due. On a trade acceptance, the seller is both the drawer and the payee.

Draft

A preliminary version of a document or an order for payment issued by one party to another.