A company makes a profit each month with probability 0.7. What is the probabilit

Elleanor Mckenzie

Elleanor Mckenzie

Answered question

2021-10-20

A company makes a profit each month with probability 0.7. What is the probability that it makes a profit in exactly two of the next three months?
Conditional probability: Yes or No

Answer & Explanation

estenutC

estenutC

Skilled2021-10-21Added 81 answers

From the provided information,
Company makes a profit each month with probability 0.7 that is p=0.7
Sample size (n)=3
The process will follow binomial distribution with probability distribution function as follow:
P(X=x)=nCxpx(1p)nx
Here x is the number of months the company makes profit.
No, this is not a conditional probability.
Now, the required probability it makes a profit in exactly two months can be obtained as:
P(X=2)=3C2(0.7)2(10.7)32
=3!2!(32)!(0.7)2(0.3)
=3(0.49)(0.3)
=0.441
Thus, the required probability is 0.441.

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