Determine Whether the Following Is a Probability Distribution

question 130

Essay

Determine whether the following is a probability distribution. If not, identify the requirement that is not satisfied.
-In a certain town, 70% of adults have a college degree. The accompanying table describes the probability distribution for the number of adults (among 4 randomly selected adults)who have a college degree. $$\begin{array} { c | r } \mathrm { x } & \mathrm { P } ( \mathrm { x } ) \\\hline 0 & 0.0081 \\1 & 0.0756 \\2 & 0.2646 \\3 & 0.4116 \\4 & 0.2401\end{array}$$

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Definitions:

Modified Duration

A measure of a bond's price sensitivity to changes in interest rates, taking into account the bond's yield, coupon, and time to maturity.

Hedge Ratio

A ratio used to measure the amount of exposure reduced by hedging, typically in the context of derivatives and risk management.

T-bond Futures

Futures contracts that are agreements to buy or sell U.S. Treasury bonds at a predetermined price on a specified date in the future.

Incentive Bonus

A form of additional compensation used to motivate and reward employees beyond their regular pay for achieving specified performance targets.