Question
Determine if the following probability experiment represents a binomial experiment. If not, explain why. If the probability experiment is a binomial experiment, state the number of trials, \( n \), and probability of success, \( p \). An investor randomly purchases 8 stocks listed on a stock exchange. Historically, the probability that a stock listed on this exchange will increase in value over the course of a year is \( 50 \% \). The number of stocks that increase in value is recorded. Select the correct choice below and, if necessary, fill in the answer boxes to complete your answer. A. Yes, because the experiment satisfies all the criteria for a binomial experiment, \( n=\square \) and \( p=\square \). (Type integers or decimals. Do not round.) B. No, because there are more than two mutually exclusive outcomes for each trial. C. No, because the trials of the experiment are not independent because the probability of success differs from trial to trial. D. No, because the experiment is not performed a fixed number of times.
Ask by Higgins Frank. in the United States
Mar 16,2025
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Answer
A. Yes, because the experiment satisfies all the criteria for a binomial experiment, \( n=8 \) and \( p=0.5 \).
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Beyond the Answer
A. Yes, because the experiment satisfies all the criteria for a binomial experiment, \( n=8 \) and \( p=0.5 \). Each stock can either increase in value (success) or not increase in value (failure), meeting the binomial requirements: a fixed number of trials (purchasing 8 stocks), two possible outcomes, constant probability of success, and independent trials. So you're all set for some fun stock analysis!