For the Binomial Distribution with the Given Values for N

question 135

Multiple Choice

For the binomial distribution with the given values for n and p, state whether or not it is suitable to use the normal
distribution as an approximation.
-n = 17 and p = 0.8

• A) Normal approximation is suitable.
• B) Normal approximation is not suitable.

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Definitions:

Diversification

An investment strategy aimed at reducing risk by allocating investments among various financial instruments, industries, or other categories.

Economic Growth

The growing ability of the economy to produce goods and services.

Industry-specific

Pertains to aspects or characteristics unique to a particular industry or sector.

Lemons

A colloquial term in economic theory often referring to products of inferior quality sold because of asymmetric information between buyers and sellers.