Use a Poisson Approximation to the Binomial to Work Out

question 1

Multiple Choice

Use a poisson approximation to the binomial to work out the probability that there will be less than two faulty electric motors in a box of 100 with a defect rate of 0.5% (as a percentage, 1 decimal place)

• A) 3.8%
• B) 4.0%
• C) 4.2%
• D) 4.4%

---

Definitions:

IFRS 9

An International Financial Reporting Standard that deals with the accounting for financial instruments, covering the classification, measurement, and recognition of financial assets and liabilities.

Accumulated Other Comprehensive Income

Represents the total of all unrealized gains and losses that are not included in net income but affect shareholders' equity.

Economic Situation

The state of the economy at a given time, influenced by factors such as GDP, unemployment rates, and inflation.

Profitability

A measure of the efficiency and financial performance of a business, indicating its ability to generate income relative to revenue, assets, or equity.