A Student Has 3 Exams

question 30

Multiple Choice

A student has 3 exams.The probability that he does "well" on his first exam is 80%.However,his performance on the remaining two exams depends on how "well" he did on the previous exam.The probability of doing "well" on an exam is 95% if the previous exam was done "well",but only 50% if the previous was not done "well".What is the probability he does "well" on exactly 2 of his 3 exams?

• A)15.3%
• B)27.8%
• C)32.7%
• D)38.4%

---

Definitions:

Operating Lease

A contract that allows for the use of an asset but does not convey rights of ownership of the asset.

After-Tax Cost

The actual cost to a company or individual after considering the effects of taxes, often used in evaluating the cost of financing options.

Leasing Analysis

It is the examination of the financial aspects of leasing to determine whether leasing is a more viable option than purchasing.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in alignment with the firm's goal of shareholder value maximization.