CFA Practice Question

There are 434 practice questions for this study session.

CFA Practice Question

In a large metropolitan area, records revealed that 30 percent of all high school graduates go to college. From 20 graduates selected at random, what is the probability that exactly 8 will go to college?
A. 0.231
B. 0.114
C. 0.400
Explanation: This is a binomial probability. The probability of getting r successes out of n trials, where the probability of success each trial is p and probability of failure each trial is q (where q = 1-p), is given by: n!(pr)[q(n-r)]/[r!(n-r)!]. Here, n = 20, r = 8,p = 0.3 and q = 0.7. Therefore, we have 20!(0.38)(0.712)/[8!12!] = 0.114.

User Contributed Comments 5

User Comment
samerthehammer Shouldn't be 20 Combination 8 at the begining of the formula.
shiva5555 20!/8!12! is the same as 20 combination 8. Just use the calculator its easier.
dipu617 I'm getting "125,970" for 20 combination 8!!!! Any explanation?????
cebus You probably missed some numbers when dividing
safash Dipu that's rite

20C8* .30^8*.70^12

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