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It Was Believed That the Probability of a Small Business

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It was believed that the probability of a small business that declared bankruptcy per month was the same in any month.Also,the number of small businesses that declared bankruptcy was the same every month.Which of the following distributions would you use to determine the probability that more than 3 bankruptcies will occur next month?


Definitions:

Issuance of Stock

The process by which a company distributes its shares to investors, thereby raising capital.

Formal Journal Entry

A written record in the books of accounts that documents a business transaction systematically.

Stock Warrants

A form of derivative that gives the holder the right, but not the obligation, to buy a company's stock at a specific price before the warrant expires.

Intrinsic Value Method

A method of valuing a company or its stock by determining the present value of its expected future earnings or cash flows, disregarding current market conditions.

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