An Insurance Agent Has Appointments with Four Prospective Clients Tomorrow

question 43

Multiple Choice

An insurance agent has appointments with four prospective clients tomorrow. From past experience the agent knows that the probability of making a sale on any appointment is one out of five. Using the rules of probability,what is the likelihood that the agent will sell a policy to three of the four prospective clients?

• A)0.250
• B)0.500
• C)0.410
• D)0.026

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Definitions:

Bankruptcy

A legal proceeding involving a person or business that is unable to repay outstanding debts, which allows for the assets of the debtor to be measured and evaluated, and the liabilities to be discharged or restructured under the protection of bankruptcy court.

Loan Agreement

A contract between a borrower and a lender outlining the terms and conditions of a loan.

Bankruptcy Defense

Strategies or legal arguments used by a defendant in litigation to counter claims made in the context of a bankruptcy case.

Suretyship Agreement

An agreement in which one party (the surety) guarantees the debt of a borrower to a lender, agreeing to repay the debt should the borrower default.