A Random Variable X Is Distributed Binomially with N =

question 43

Multiple Choice

A random variable X is distributed binomially with n = 8 and π = 0.70. The standard deviation of the variable X is approximately:

• A)0.458
• B)2.828
• C)1.680
• D)1.296

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Definitions:

Accounting Beta

A measure of the sensitivity of a firm's earnings before interest and taxes to changes in the market as a whole.

Pure Play Method

A valuation method focusing on companies specializing in a single line of business to estimate investment risks and returns.

Scenario Analysis

A method used in finance to analyze the different possible outcomes of a decision given varying sets of assumptions.

Sensitivity Analysis

A financial modeling tool used to determine how different values of an independent variable will impact a particular dependent variable under a given set of assumptions.