Use the Appropriate Probability Model (Geometric)

question 15

Multiple Choice

Use the appropriate probability model (Geometric) .
-A specific automotive part that a service station stocks in its inventory has an 8%
Chance of being defective. Suppose many cars come into the service station needing this
Part each week. What is the probability that the fourth part retrieved from stock is the
First defective?

• A) 0.0064
• B) 0.08
• C) 0.0378
• D) 0.0623
• E) 0.3244

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Definitions:

Bond Indenture Agreements

Legal documents specifying the rights and obligations of both the issuing company and the bondholders, including details about interest payments and the maturity date.

Dividends Low

A situation where a company chooses to distribute a relatively small portion of its earnings to shareholders as dividends.

Terms

Conditions and stipulations that govern the agreement or contract between parties, often detailing the obligations, rights, and responsibilities of each party.

Automatic Dividend Reinvestment

A feature that allows shareholders to automatically use their dividend payments to purchase additional shares of the stock, usually without a commission.