- CFA Exams
- CFA Exam: Level I 2021
- Study Session 3. Quantitative Methods (2)
- Reading 9. Common Probability Distributions
- Subject 5. The Binomial Distribution

###
**CFA Practice Question**

As part of a promotion for a new type of cracker, free trial samples are offered to shoppers in a local supermarket. The probability that a shopper will buy a packet of crackers after testing the free sample is 0.20. Different shoppers can be regarded as independent trials. Let X be the number among the next twenty shoppers who buy a packet of the crackers after tasting a free sample. The standard deviation of X is ______.

B. 3.20

C. 1.79

A. 4.00

B. 3.20

C. 1.79

Correct Answer: C

X, the number of shoppers who buy a packet of crackers after tasting a free sample, has a binomial distribution with parameters n = 20 and p = 0.2. The standard deviation of X is [np(1-p)]

^{1/2}= 1.79.###
**User Contributed Comments**
4

User |
Comment |
---|---|

cleopatraliao |
hv to read the question more carefully--"next twenty shoppers..." |

Oregon |
same, i calculated the variance and stopped there |

Debashree |
same man...i need to remeber np*(1-p) is variance and not std dev. |

gyee2012 |
Probability Calc Variance = p (p-1) * n Std = Var^1/2 |