Find the Standard Deviation of the Binomial Random Variable

question 123

Multiple Choice

Find the standard deviation of the binomial random variable.
-The probability of winning a certain lottery is 1/70,366. For people who play 929 times, find the standard deviation for the random variable X, the number of wins.

• A)3.5021
• B)0.1259
• C)0.0132
• D)0.1149

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Definitions:

Compounded Annually

A method of calculating interest where the earned interest is added to the principal at the end of each year, increasing the amount that will earn interest in the following year.

Acquisition Cost

Refers to all of the costs involved in acquiring a new asset or company, including the purchase price and all associated expenses.

Deferred Ordinary Annuity

An annuity contract that begins payments at a specified future date, as opposed to immediately after the initial investment.

Present Value

The value today of a future sum of money or sequence of cash inflows, factoring in a given return rate.