A Company Is Going to Release Four Quarterly Reports This

question 40

Essay

A company is going to release four quarterly reports this year.Suppose the company has a 32% chance of beating analyst expectations each quarter.
A)What is the probability that the company beats analyst expectations every quarter of this year?
B)What is the probability the company beats analyst expectations more than half the time this year?
C)What is the probability of the expected number of times the company will beat analyst expectations this year?

• A)What is the probability that the company beats analyst expectations every quarter of this year?
• B)What is the probability the company beats analyst expectations more than half the time this year?
• C)What is the probability of the expected number of times the company will beat analyst expectations this year?

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Definitions:

Mental Set

A tendency to approach situations in a certain way because that method worked in the past.

Dramatically Affect

Refers to having a profound or significant impact on something.

Representativeness Heuristic

A mental shortcut that involves judging the likelihood of an event by comparing it to an existing prototype in our minds.

Availability Heuristic

A mental shortcut that relies on immediate examples that come to a given person's mind when evaluating a specific topic or decision.