Suppose 80 Experts Flip a Coin to Predict Whether the Prices

question 57

Multiple Choice

Suppose 80 experts flip a coin to predict whether the prices of stocks will rise or fall for the year. After 4 years, how many experts will have correctly predicted the direction of the stock market?

• A) 13
• B) 8
• C) 33
• D) 5

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Definitions:

Zero Marginal Cost

The situation in which producing an additional unit of a good or service does not incur any additional cost.

Fixed Cost

Costs that do not change with the level of production or output, such as rent, salaries, and loan payments.

Patent

A legal right granted to an inventor that provides exclusive commercial rights to an invention or process for a certain period.

Inverse Demand Function

A mathematical formula that expresses the price of a good or service as a function of the quantity demanded, demonstrating how price is influenced by changes in demand.