Binomial RV (Use Excel’s Binom.Dist. function, and show your work including the

Question

Binomial RV (Use Excel’s Binom.Dist. function, and show your work including the parameters you used )

At the University of Notre Dame (College of Business), 40% of the students seeking a master’s degree specialize in finance. Suppose we randomly select twenty (20) master’s degree students.

a)Use Binom.Dist to answer the following (show your work, including the binom.dist functions you used). Determine the following probabilities.

i)What is the probability that exactly 10 of the students specialize in finance?

ii)What is the probability that no more than 10 of the students specialize in finance?

iii)What is the probability that at least 15 of the students specialize in finance?

b)Explain why this is an example of a binomial experiment, specifically

i.What is the experiment?

ii.How many trials (n) are in the experiment?

iii.What are the two possible outcomes on each trial?

iv.What is the probability of “success” on each trial?

v.What is the binomial random variable (S)?

c)What is the expected number of students who will specialize in finance (i.e. calculate the expected value)?

Explanation / Answer

a) (i) P(X=10)= binomdist(10,20,0.4,false)=0.1171

(ii)P(X<=10) =binomdist(10,20,0.4,true)=0.8725

(iii)=P(X>=15) =1-P(X<=14) =1-binomdist(14,20,0.4,true) =0.0016

b)this experiment is done to find out numebr of students who wish to specialize in finance

(ii) 20 trails

(iii) seeking a specialization in finance and not seeking a specialization in finance

(iv) =0.40

v) binomial random variable S is number of student in 20 sample size seeking to specialize in finance

c) xpected value =np=20*0.4=8

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