The Manager of C & R Clothiers, a Major Manufacturer

question 136

Short Answer

The manager of C & R Clothiers, a major manufacturer of men's shirts, has determined that 3% of C & R's shirts do not meet with company standards and are sold as "seconds" to discount and outlet stores. What is the probability that in a day's production of 200 dozen shirts, less than 12 dozen will be classified as "seconds"?
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Round your answer to four decimal places, if necessary.
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Definitions:

Risk-Free Rate

The theoretical return on an investment with zero risk, often represented by the yield on government securities such as U.S. Treasury bills.

Expected Return

The weighted average of all possible returns for an investment, taking into account the probabilities of each outcome, and a key concept in portfolio management and capital budgeting.

Factor Sensitivities

Refers to the responsiveness of an asset's return to changes in underlying factors, often used in the context of multifactor models to evaluate investment risk.

Multifactor APT

A model that describes the returns of an asset as dependent on various macroeconomic or market factors, extending the Arbitrage Pricing Theory (APT).