If the Rate of Defaults Per Year in a Set $$\lambda = 5$$

question 14

Multiple Choice

If the rate of defaults per year in a set of companies is given by $$\lambda = 5$$ ,what is the probability of four or more defaults in half a year?

• A)0.06
• B)0.12
• C)0.18
• D)0.24

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Definitions:

Confidence Interval

A spectrum of values obtained from sample data, expected to encompass an unknown parameter of the entire population with a certain degree of assurance.

Standard Deviation

A measure of the amount of variation or dispersion in a set of values.

Confidence Interval

An estimated range of values which is likely to include an unknown population parameter, calculated from a given set of sample data.

Margin of Error

An expression of the amount of random sampling error in a survey's results, indicating a range within which the true value lies at a certain confidence level.