Pg. 191
Part I
1.
probability distribution
2.
probability of each random value with the value of the variable.
3.
one
4.
mean of the distribution
5.
two (2). There are two outcomes in binomial dist.= either 0 or 1.
6.
When probability is not equal to half then there is a chance that probability of a
success change from trial to trial in a binomial.
7.
equal
8.
binomial distribution
9.
This is a binomial distribution with n = 10 and r = 2. Probability of success is .05
The value of prob (r=2)=0.0746
10. That means it is a poison variate with parameter 1.7
The required probability is e
1.7
= 0.18268
Part II.
1. The IRS reports that 15 percent of the tax returns where the adjusted gross income is
more than $1,000,000 will be subject to computer audit. For a particular year a CPA
completed 16 returns where the adjusted gross income was more than $1,000,000.
a. Which probability model does this situation follow?
The probability model is binominal distribution.
11.
b. What is the probability exactly one of there returns is audited?
W have n=16 and p=0.15
P [X = x] =
n
C
x
p
x
(1 – p)
n – x
P [X = 1] =
16
C
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 Fall '11
 Kent
 Normal Distribution, Poisson Distribution, Probability theory, Tax Returns, Discrete probability distribution

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