The Binomial Distribution Can Be Well Approximated by the Normal

question 57

True/False

The binomial distribution can be well approximated by the normal distribution when the number of trials n is sufficiently small and the probability of success p is not too close to 0 or 1.

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Definitions:

Mortgage Market

The market where lenders and borrowers come together to trade mortgages, which are loans secured by real property.

Housing Crises

A situation characterized by a severe shortage of affordable housing, leading to increased homelessness and financial strain on individuals and families.

Adjustable Rate Mortgages

A type of mortgage loan where the interest rate can change over time based on a benchmark interest rate or index that reflects the cost to the lender.

TARP Bailout

A program initiated by the U.S. government during the 2008 financial crisis to purchase toxic assets and inject capital into banks to stabilize the financial system.