Question

An American Association of Individual Investors (AAII) survey found that 33% of AAII members had purchased shares of stock directly through an Initial Public Offering (IPO). From a random sample of 20 AAII members, (Give answers to four decimal places.)

a) what is the probability that exactly 6 had purchased IPO’s?

b) what is the probability that between 8 and 12 had purchased IPO’s?

c) what is the probability that more than 10 had purchased IPO’s?

Answer 1

X : number of members who have purchased IPO's

X~ bin (n,p)

where, n = 20

p = 33% = 0.33

q = (1-p) = (1-0.33) = 0.67

the pmf of the distribution be:-

a).the probability that exactly 6 had purchased IPO’s be:-

b).the probability that between 8 and 12 had purchased IPO’s be:-

c).the probability that more than 10 had purchased IPO’s be:-

[ in any blank cell of excel type =BINOMDIST(10,20,0.33,TRUE) press enter ]

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