The Probability That a Particular Brand of Smoke Alarm Will

question 75

Multiple Choice

The probability that a particular brand of smoke alarm will function properly and sound an alarm in the presence of smoke is 0.8. You have 5 such alarms in your home and they operate independently. Which of the following distributions would you use to figure out the probability that all of them will function properly in case of a fire?

• A) Poisson distribution
• B) uniform distribution
• C) binomial distribution
• D) normal distribution

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Definitions:

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, often represented by the yield of government securities.

Market Risk

The possibility of an investor experiencing losses due to factors that affect the overall performance of the financial markets.

Specific Companies

Refers to individual firms or corporations identified by their unique characteristics, operations, or market activities.

Market Risk

The risk of losses in investments caused by factors affecting the entire market or economy, such as recessions or political instability.