One study by CNNMoney reported that 60% of workers have less than $25,000 in tot
ID: 2922559 • Letter: O
Question
One study by CNNMoney reported that 60% of workers have less than $25,000 in total savings and investments (excluding the value of their home). If this is true and if a random sample of 20 workers is selected, what type of distribution would this represent? (Circle the answer) A binomial, a Poisson or Hypergeometric.
a. Also what is the probability that fewer than 10 have less than $25,000 in total savings and investments?
b. Finally, calculate the mean, variance, and standard deviation for this distribution?
Explanation / Answer
a) This will be a binomial distribution.
b) P(Fewer than 10)
= P(X < 10)
= P(X < 9)
= binomdist(9, 20, 0.60, TRUE) [Excel Fromula]
= 0.1275 [Rounded off to 4 decimal places]
c) Mean = np = 20(0.60) = 12
Variance = npq = 20(0.60)(0.40) = 4.8
Standard deviation = sqrt(Variance) = 2.1909 [Rounded off to 4 decimal places]
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