A Tutoring Company Claims That 75% of the High School

question 73

Essay

A tutoring company claims that 75% of the high school students who hire one of their tutors will improve their grades.
A) In a sample of 100 high school students, what is the probability that 80% or more improved their grades?
B) In a sample of 200 high school students, what is the probability that 80% or more improved their grades?
C) Comment on the reason for the difference between the computed probabilities in parts a and b.

• A) In a sample of 100 high school students, what is the probability that 80% or more improved their grades?
• B) In a sample of 200 high school students, what is the probability that 80% or more improved their grades?
• C) Comment on the reason for the difference between the computed probabilities in parts a and b.

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Definitions:

Cost of Debt

is the effective rate that a company pays on its total debt, an important component in calculating the cost of capital.

Security Market Line

A graphical representation of the risk-return trade-off for individual securities, illustrating the capital asset pricing model (CAPM).

Risk-free Rate

The yield from an investment that carries no risk of losing money.

Expected Return

Return on a risky asset expected in the future.