A Frustrated Store Manager Is Asked to Make Seven Different

question 76

Multiple Choice

A frustrated store manager is asked to make seven different yes-no decisions that have no relation to each other. Because he is impatient to leave work, he flips a coin for each decision. If the correct decision in each case was no, what is the probability that all of his decisions were correct? ​

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Definitions:

Compounding Interval

The frequency with which interest is added to the principal balance of an investment.

Monthly Compounded

Monthly compounded refers to the process of calculating interest on a principal amount where the interest is added to the principal at the end of each month, thereby earning interest on interest in subsequent months.

Effective Rate

The interest rate on a loan or investment, adjusted for the effect of compounding.

Interest Rate

The rate at which a borrower is charged interest for the money borrowed from a lender.