The Reliability of a New Model of CD Player Can

question 71

Multiple Choice

The reliability of a new model of CD player can be described by the exponential function R(t) = 2.7-(1/3) t, where the reliability R is the probability (as a decimal) that the CD player is still working t years after it is manufactured. Round the answer to the nearest hundredth. Then write your answer as a percent.
-What is the probability that the CD player will still work 5 years after it is manufactured?

• A) 1%
• B) 94%
• C) 19%
• D) 7%

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Definitions:

Current Yield

The annual income (interest or dividends) divided by the current price of the security, often used to assess the return on investment in bonds.

Required Rate

The minimum expected rate of return by investors for providing capital to a company, often used in valuing investments.

Constant Dividend

A fixed amount of money paid to shareholders of a corporation out of its earnings on a regular basis.