Determine whether the following probability experiment represents a binomial exp

Question

Determine whether the following probability experiment represents a binomial experiment and explain the reason for your answer. An investor randomly purchases 9 stock exchange. Historically, the probability that a stock listed on this exchange will increase in value over the course of a year is 48%. The number of stocks that increase in value is recorded. Does the probability experimant represent a biniomial experiment? A. No, because there are more than two mutually exclusive outcomes for each trial. B. No, because the trials of the experiment are not independent. C. No, because the probability of success differs from trial to trial. D. Yes, because the experiment satisfies all the criteria for a binomial experiment.

Explanation / Answer

D) Yes, because the experiment satisfies all the criteria for a binomial experiment.

criteria Independent and probability is fixed

  

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