?In a Poisson Probability Problem, the Rate of Defects Is

question 74

Multiple Choice

?In a Poisson probability problem, the rate of defects is one every two hours.To find the probability of three defects in four hours,

• A) = 1, x = 4
• B) = 2, x = 3
• C) = 3, x = 4
• D) = 4, x = 3

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Definitions:

Interest Rate Swap

A financial derivative contract in which two parties agree to exchange one stream of interest payments for another, based on a specified principal amount.

Fixed Rate

An interest rate that remains constant over the life of a loan or investment, unaffected by market fluctuations.

Derivative

A financial tool whose worth derives from the worth of a different asset.

Call Option

A call option is a financial contract giving the buyer the right, but not the obligation, to buy an underlying asset at a specified price within a predetermined time frame.