A Multiple-Choice Test Has 30 Questions

question 26

Multiple Choice

A multiple-choice test has 30 questions.There are 4 choices for each question.A student who has not studied for the test decides to answer all questions randomly.What type of probability distribution can be used to figure out his chance of getting at least 20 questions right?

• A)binomial distribution.
• B)Poisson distribution.
• C)Either of the above
• D)none of the above.

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Definitions:

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturity date, taking into account both interest payments and capital gains or losses.

Coupon Rate

The interest rate on a bond that the issuer promises to pay to the bondholder until maturity.

Premium

The amount by which the price of something, especially a financial security, exceeds its principal or face value.

Interest Rates

The cost of borrowing money or the return on investment for savings, usually expressed as a percentage of the principal amount on an annual basis.