A Local Bank Has Determined That the Number of Companies

question 16

Multiple Choice

A local bank has determined that the number of companies listed in the area declaring bankruptcy follows an approximately a Poisson distribution with a mean of 2.6 per year.
-Find the probability that exactly 4 bankruptcies occur next year.

• A)8774
• B)1414
• C)1557
• D)2176
• E)2500

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Definitions:

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation, a creditor relationship with a governmental body or corporation, or rights to ownership as represented by an option.

Trade Balance

The difference in value between a country's imports and exports over a given period, a component of a country's balance of payments.

Merchandise Exports

Goods produced within a country and sold to customers in another country, contributing to the country's gross domestic product.

Capital Account

A national account that records the transactions involving international transfer of capital, such as foreign direct investments and portfolio investments.