A Student Takes a True-False Test That Has 12 Questions

question 25

Multiple Choice

A student takes a true-false test that has 12 questions and guesses randomly at each answer. Let X be the number of questions answered correctly. Find P(10 or more)

• A)0.0032
• B)0.0730
• C)0.0193
• D)0.9270

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Definitions:

Dollar-Weighted Return

A method of calculating an investment's return that considers the timing and amount of each investment or withdrawal made.

Geometric Average Return

The average rate of return per period on an investment, calculated geometrically to account for compounding effects.

Arithmetic Average Return

The sum of all returns in a series divided by the number of returns, used to calculate the average performance of an investment over time.

Complete Portfolio

A combination of a risk-free asset and one or more risky assets, structured to meet the investor's risk-return objectives.