Consider a Binomial Random Variable X with N = 7

question 40

Essay

Consider a binomial random variable X with n = 7 and p = 0.3.
a. Find the probability distribution of X.
b. Find P(X < 3).
c. Find the mean and the variance of X.

---

Definitions:

Unsystematic Risk

The type of risk that is specific to a company or industry, stemming from factors like management decisions or regulatory changes, and can be mitigated through diversification.

Limited Number

A restricted quantity, usually referring to a specific allocation or issuance of items, resources, or opportunities.

Standard Deviation

A measure of the dispersion or variability of a set of data points from their mean, used in statistics to quantify the amount of variation or dispersion of a dataset.

Total Risk

The complete spectrum of all types of risk that an investment or project might face, including both systematic and unsystematic risks.