How much money should be invested now (rounded to the nearest cent), called the present value, in a Treasury Bond investment, yi
2 answers:
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Answer:
We know that n = 50 and p =0.78.
We need to check the conditions in order to use the normal approximation.
Since both conditions are satisfied we can use the normal approximation and the distribution for the proportion is given by:
With the following parameters:
Step-by-step explanation:
Previous concepts
The binomial distribution is a "DISCRETE probability distribution that summarizes the probability that a value will take one of two independent values under a given set of parameters. The assumptions for the binomial distribution are that there is only one outcome for each trial, each trial has the same probability of success, and each trial is mutually exclusive, or independent of each other".
Solution to the problem
We know that n = 50 and p =0.78.
We need to check the conditions in order to use the normal approximation.
Since both conditions are satisfied we can use the normal approximation and the distribution for the proportion is given by:
With the following parameters: