A Batch of 50 Parts Contains 6 Defects

question 79

Multiple Choice

A batch of 50 parts contains 6 defects. If two parts are drawn randomly, one at a time, and tested, what is the probability that both parts are defective?

• A) 0.014
• B) 0.012
• C) 0.120
• D) 0.102
• E) 0.222

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Definitions:

Coupon Bond

A bond that pays the holder a fixed interest rate (coupon payment) over the bond's lifetime, in addition to returning the principal at maturity.

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturity date, considering all payments and the face value.

Intrinsic Value

The true, inherent, and underlying value of an asset, independent of its market price.

Zero-Coupon Bonds

A type of bond that does not pay periodic interest payments but is issued at a discount to its face value and matures at that face value.