If X Has a Binomial Distribution with 20 Trials and a Mean

question 21

Multiple Choice

If X has a binomial distribution with 20 trials and a mean of 6, then the success probability p is:

• A)0.3.
• B)0.5.
• C)0.75.
• D)This cannot be determined without taking a sample.

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Definitions:

M&M II

The second proposition by Modigliani and Miller which states that in the absence of taxes, bankruptcy costs, and asymmetric information, and in an efficient market, the value of a levered firm is equal to the value of an unlevered firm plus the present value of the tax shields due to debt.

Pre-Tax Cost

Pre-Tax Cost refers to the expense or cost a company incurs before any taxes are deducted.

Debt-Equity Ratio

A financial ratio indicating the relative proportion of shareholder's equity and debt used to finance a company's assets.

Weighted Average

A mathematical calculation that takes into account the varying degrees of importance of the numbers in a data set, providing a measure that reflects the relative importance of each value.