For Which Binomial Distribution Would a Poisson Approximation Be Unacceptable

question 31

Multiple Choice

For which binomial distribution would a Poisson approximation be unacceptable?

• A)n = 30, π = 0.02
• B)n = 50, π = 0.03
• C)n = 200, π = 0.10
• D)n = 500, π = 0.01

---

Definitions:

Specific Assets

Assets identified and designated for a particular purpose or project, often distinguished from general or unspecified assets.

Bond Indenture

A legal contract between a bond issuer and bondholders, detailing the terms of the bond such as the interest rate, maturity date, and obligations of both parties.

Investment Company

A corporation or trust engaged in the business of investing the pooled capital of investors in financial securities.

Bond Certificate

A legal document that indicates the name of the issuer, the face value of the bonds, the contractual interest rate, and maturity date of the bonds.