The Probability That a Customer Will Use a Stolen Credit

question 89

Multiple Choice

The probability that a customer will use a stolen credit card to make a purchase at a certain Target store is 0.003. If 400 purchases are made in a given day, what is the approximate Poisson probability that 4 or fewer will be with stolen cards?

• A).0053
• B).0076
• C).9923
• D).0555

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Definitions:

Spending Variance

The difference between the actual amount spent and the budgeted amount for a particular item or category.

Direct Materials

The raw materials and components that are directly incorporated into a finished product and can be easily traced to it.

Activity Level

A measure of the volume of production or services that determines the amount of costs incurred in a business.

Administrative Expenses

Costs related to the general operation of a business, such as salaries of executive personnel, accounting, and human resources.