You are aware that your neighbor trades stocks based on confidential information he overhears at his workplace. This information
1 answer:
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Answer:
Explanation:
Since the four<em>-cash-flow stream</em> is <em>uneven</em>, the manual calculation involves the calculation of four separate present values which you have to add.
The <em>cash flows </em>are:
- Year 1: 700
- Year 2: 355
- Year 3: 240
- Year 4: 320
The required rate of return is r = 10% = 0.10
The formula that you must use is:
Where <em>PV </em>is the <em>present value</em>; CF₁, CF₂, CF₃, CF₄ are the cash flows of the years 1, 2, 3, and 4 respectively, and i is the annual return.
Substituting:
Answer:
probability = 0.008
probability = 0.0256
Explanation:
we know here probability of defective is 0.2
so probability of not defective is 1 - 0.2 = 0.8
as we know 3 item is arrive off process line in succession
so The probability that an item is defective is
as P(defective) = 0.20
as all item are independent so
probability that all three items are defective is
probability = 0.20 × 0.20 × 0.20 = 0.008
and
probability that exactly 3 of next 4 are defective
so number of way that can choose 3 out of 4 is
=
= 4
so as all are independent probability is
probability = ( the number of way to choose 3 out of 4 ) × ( 3 item defective ) × ( 1 item not defective )
probability = × 0.2³ × ( 1- 0.2)
probability = 4 × 0.008 × 0.8
probability = 0.0256