Is the Following an Example of Theoretical Probability or Empirical

question 32

Multiple Choice

Is the following an example of theoretical probability or empirical probability? A fisherman notes that eight out of ten times that he uses a certain lure he catches a fish within an hour. He concludes
That the probability that the lure will catch a fish on his fishing next trip is about 80%

• A) Empirical
• B) Theoretical

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Definitions:

Non-Interest-Bearing

Refers to financial instruments or accounts that do not yield interest over time, such as some checking accounts.

Discounted

The practice of reducing the selling price of goods or services, often to encourage sales.

Discount Method

A financial strategy where the interest and financing charges are calculated at the time of the sale and deducted from the principal before the loan is disbursed.

Actual Interest Rate

The real rate of interest earned or paid on an investment, loan, or savings, taking into account compounding and fees.