Estimate the Indicated Probability by Using the Normal Distribution as an Approximation

question 7

Multiple Choice

Estimate the indicated probability by using the normal distribution as an approximation to the binomial distribution. Estimate P(6) for n=18 and p=0.3 .

• A) 0.1239
• B) 0.1015
• C) 0.8513
• D) 0.1958

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Definitions:

Market Index

A statistical aggregate that measures the performance of a basket of stocks to represent a particular market or sector.

Beta Coefficients

Statistical measures indicating the volatility of a stock or portfolio in comparison to the volatility of the overall market.

Industry Group

A classification of companies that conduct similar types of business, used for analysis and comparison within the stock market.

Dividend Yield

The annual dividend payment expressed as a percent of the stock price.