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

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**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 100 shoppers who buy a packet of the crackers after tasting a free sample. X has approximately a ______.

A. N(4, 20) distribution

B. N(20, 4) distribution

C. N(0.2, 16) distribution

**Explanation:**The distribution is approximately normal with mean np = 20 and standard deviation [np(1-p)]

^{1/2}= 4.

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**User Contributed Comments**
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User |
Comment |
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Pooh |
Binomial probability: N(mean, stdev.) |