Description
You do not need to answer the question. Instead justify your choice.
Bankruptcies: The mean number of bankruptcies filed per minute in the United States in a recent year was about two. Find the probability that (a) exactly five businesses will file bankruptcy in any given minute, (b) at least five businesses will file bankruptcy in any given minute, and (c) more than five businesses will file bankruptcy in any given minute.
Explanation & Answer
The number of companies is quite large. That is, n is quite large.
The probability that a company declares bankruptcy is quite small , p is quite small.
np = the mean number of bankruptcies = 2 = a finite number.
Hence we can apply Poisson distribution for the data.
P (x=5 | mean =2) = e-2 25/5! = e-2 * 32/120 = 0.036089
Alternatively
=poisson(5,2,0) = 0.036089
P(x≥ 5 | mean =2) = 1- P( x ≤ 4) = 1- e-2 (1+2+22/2!+23/3!+24/4!)= 1-e-2 (1+2+2+8/6+16/24)= 1-e-2(7)
=0.052653
Alternatively
= 1- poisson(4,2,1) =0.052653
P(X > 5 | mean =2) = 1- p(x
≤ 5) =1- e-2 (1+2+22/2!+23/3!+24/4!+25/5!)= 1-e-2(7+4/15)
=0.016564
alternatively=1-poisson(5,2,1)
=0.016564
Review
Review
