An insurance agent has appointments with four prospective clients tomorrow. From past experience the agent knows that the probability of making a sale on any appointment is 1 out of 5. Using the rules of probability, what is the likelihood that the agent will sell a policy to 3 of the 4 prospective clients?
A) 0.250
B) 0.500
C) 0.410
D) 0.026
E) None of the choices are correct

Question

Quizplus · Accepted Answer

The probability of making a sale is 1/5, and not making a sale is 4/5. Using the binomial probability formula, the probability of exactly 3 sales out of 4 appointments is calculated as: C(4,3) * (1/5)^3 * (4/5)^1 = 4 * 0.008 * 0.8 = 0.0256, which rounds to 0.026.

An Insurance Agent Has Appointments with Four Prospective Clients Tomorrow