Find the Indicated Probability $\frac { 1 } { 729 }$

question 54

Multiple Choice

Find the indicated probability.
-Find the probability of correctly answering the first 3 questions on a multiple choice test if random guesses are made and each question has 6 possible answers.

• A) \(\frac { 1 } { 729 }\)
• B) \(\frac { 1 } { 2 }\)
• C) \(\frac { 1 } { 216 }\)
• D) 2

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Definitions:

European Put

A financial derivative option that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price on or before a specified expiration date, exclusively in the European context where it can only be exercised at expiration.

Strike Price

The predetermined price at which the holder of an option contract can buy (in case of a call option) or sell (in case of a put option) the underlying asset.

Expiration Date

The specific date on which an options or futures contract becomes void and the right to exercise it no longer exists.

American Call

An option contract that allows the holder to buy a specified quantity of an underlying asset at a set price before the contract expires.