Question

In: Statistics and Probability

Binomial or Poission Probabilities:A baker put 700 raisins into dough, mixed well, and made 100 cookies....

Binomial or Poission Probabilities:A baker put 700 raisins into dough, mixed well, and made 100 cookies. You take a random cookie. What is the probability of finding at least five raisins in it?

Solutions

Expert Solution

Here, we use approximation to the Binomial distribution of the number of taisins in one cookie

The number of raisins X in one cookie is Binomial with n = 700 and p = 1/100 = 0.01, it is approximately Poisson with parameter np = 700*0.01 = 7. The proabability of finding at lest five raisins is

P(X 5) = 1 - P(X<5)

Poisson distribution:

...................X = 0,1,2,3,.......................

Where, Mean = = np = 700*0.01 = 7

P(X 5) = 1 - P(X<5)

P(X 5) = 1 - P(X = 0) + P(X = 1) + P(X = 2) + P(X = 3) + P(X = 4)

P(X 5) = 1 - 0.1730

P(X 5) = 0.8270

From the poisson table


Related Solutions

Suppose that a well-mixed urn contains 100 red and blue balls, in unknown proportion. Suppose you...
Suppose that a well-mixed urn contains 100 red and blue balls, in unknown proportion. Suppose you know that there are either 80 red balls or 20 red balls. (a) If one ball is drawn at random and seen to be red, what is your probability that the urn contains 80 red balls? (b) If 5 balls are drawn randomly (with replacement) and each is seen to be red, what is the probability that the urn contains 80 red balls?
Dorothy buys a Put option on S&P 100 index for $5.25 at an exercise price of 675. The current value of S&P 100 index is 700. What would be her Holding period return if the S&P 100 index goes down to 665 by the date of expiration?
Dorothy buys a Put option on S&P 100 index for $5.25 at an exercise price of 675. The current value of S&P 100 index is 700. What would be her Holding period return if the S&P 100 index goes down to 665 by the date of expiration?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT