Question

9. Use the following information for Questions 9-15. Nine percent of undergraduate college students

have a balance on their credit card that exceeds $7000. 10 undergraduates are selected at random

and are interviewed about their credit card usage. What type of distribution is this?

a. Uniform

b. Binomial

c. Bell-shaped

d. Normal

10. What is the number of trials?

a. 10

b. 9

c. 7000

d. Unlimited

11. What is the “probability of success” (p) here?

a. 0.25

b. 0.40

c. 0.90

d. 0.09

12. What is the “probability of failure” (q) here?

a. 0.91

b. 0.60

c. 0.10

d. 0.75

13. What is the probability that 2 of these 10 students will have a credit card balance that exceeds $7000

(each)?

a. 0.3762

b. 0.2716

c. 0.1714

d. 0.0525

14. What is the probability that none of them will have a credit card balance in excess of $7000?

a. 0.0892

b. 0.1215

c. 0.2643

d. 0.3894

What is the probability that at least 3 will have a credit card balance that exceeds $7000? [Hint: You

may want to use P(X ≥ a) = 1 – P(X < a)]

a. 0.0541

b. 0.1526

c. 0.2784

d. 0.3942

Answer 1

Note: As per the honor code policy we can answer only four questions at a time.

Given:

Nine percent of students have balance of $7,000.

No. of students are selected = 10

9.

The distribution followed by the given data is Binomial distribution because:

1. There is a fixed n number of trials, which means for the given question it is 10.

2. There are only two possible outcomes which are students have a balance of 7000 and students who do not have a balance of 7000.

3. The probability of success is the same for all trials.

4. All the trials are independent of each other.

10.

The number of trials is 10, as there are 10 students have selected and interviewed about the balance on credit card.

11.

p = Proportion of students who have balance of $7000.

Here, it has been given that 9% of students have a balance of $7,000 on their credit cards.

Therefore, the value of p = 0.09.

12.

q = 1 - p

= 1 - 0.09

= 0.91