Which of the Following Distributions Can Be Used to Solve

question 73

Multiple Choice

Which of the following distributions can be used to solve the following problem? The average number of cars arriving at a drive-through fast-food restaurant is 3 cars in 10 minutes. What is the probability that exactly four cars will arrive in a 5-minute interval?

• A) binomial
• B) Poisson
• C) both binomial and Poisson
• D) neither binomial nor Poisson

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Definitions:

Par Value

The face value of a bond or stock, as stated by the issuing company; it is often a nominal figure that does not necessarily equate to the market value.

Retained Earnings

The portion of a company's profits that is kept or retained and not paid out as dividends to shareholders.

MCC Schedule

Stands for Marginal Cost of Capital Schedule, which displays the relationship between the cost of new capital and the total amount of new capital raised.

Capital Structure

Capital structure refers to the way a corporation finances its assets through some combination of equity, debt, or hybrid securities.