A Multiple-Choice Test Consists of Five Questions, Each with A-E

question 86

Multiple Choice

A multiple-choice test consists of five questions, each with A-E answers. If you guess the answer to each question, what is the probability of getting three or more questions correct?

• A) 5.1%
• B) 0.64%
• C) 0.032%
• D) 5.79%
• E) None of the choices are correct

---

Definitions:

Expected Return

Expected Return is the estimated profit or loss an investment is predicted to generate, based on historical or projected performance.

Prior Service Cost

A pension accounting term referring to the cost of benefits attributed to employee service in prior periods, often arising from plan amendments.

Pension Expense

The cost recognized by an employer for maintaining a defined benefit pension plan for its employees.

Defined Benefit Plans

Pension plans that promise a specified retirement benefit amount, which is determined by factors such as salary history and duration of employment.