A Roll of Steel Is Manufactured on a Processing Line

question 16

Multiple Choice

A roll of steel is manufactured on a processing line. The anticipated number of defects in a 10-foot segment of this roll is two. What is the probability of no defects in 10 feet of steel?

• A) 0.0002
• B) 0.1353
• C) 0.1804
• D) 0.8647

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Definitions:

Diversification

The strategy of spreading investments across various financial assets to reduce exposure to risk.

Uncorrelated

Refers to two or more variables that do not have any predictive relationship with each other.

Negatively Correlated

A relationship between two variables in which one variable increases as the other decreases.

Positively Correlated

A term describing two variables that move in the same direction, such that when one variable increases, the other also increases.