THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING

question 244

Multiple Choice

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING:
A computer store receives a shipment of 14 computers,5 of which already have modems installed.Unfortunately,the boxes are not labeled so you are unsure which computers have modems.Assume you select 4 computers.
-What is the probability that exactly two of them have modems?

• A)0.3288
• B)0.3704
• C)0.3596
• D)0.3012

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Definitions:

Strictly Convex Preferences

Strictly convex preferences indicate a consumer's increasing marginal rate of substitution, reflecting a stronger preference for balanced bundles of goods over extremes.

Risk Averse

A characteristic of a person or entity that prefers to avoid uncertainty and potentially negative outcomes, often opting for more certain or less risky options.

Risk Averse

Refers to the preference of avoiding risk rather than facing uncertainty or engaging in risky ventures.

Price of Insurance

The cost or premium that individuals or entities pay to transfer risk to an insurance company, securing financial protection against specified losses.