Assume That a Procedure Yields a Binomial Distribution with a Trial

question 40

Multiple Choice

Assume that a procedure yields a binomial distribution with a trial repeated n = 30 times. Use the binomial probability formula to find the probability of x = 5 successes given the
Probability p = 1/5 of success on a single trial. Round to three decimal places.

• A)0.172
• B)0.067
• C)0.198
• D)0.421

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Definitions:

Regression Line

A line of best fit through a dataset in statistical analysis, showing the relationship between the independent variable and the dependent variable.

CAPM (Capital Asset Pricing Model)

A model that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Risk-Free Rate

The theoretical return on an investment with no risk of financial loss, typically represented by the yield on government securities.

Market Risk Premium

An additional expected return that investors demand for choosing to invest in the stock market over a risk-free investment, reflecting the extra risk assumed.