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Online Test 2 Question 1
Online Test 2
1. Determine whether the following probability experiment represents a binomial experiment and explain the reason for your answer. An investor randomly purchases17 stocks listed on a stock exchange. Historically, the probability that a stock listed on this exchange will increase in value over the course of a year is 41%. The number of stocks that increase in value is recorded.
Does the probability experiment represent a biniomial experiment?
- No, because there are more than two mutually exclusive outcomes for each trial.
- Yes, because the experiment satisfies all the criteria for a binomial experiment.
- No, because the probability of success differs from trial to trial.
- No, because the trials of the experiment are not independent.