A local bank has determined that the number of companies listed in the area declaring bankruptcy follows an approximately a Poisson distribution with a mean of 2.6 per year.
-Find the probability that more than 1 bankruptcy occurs next year.
A)1931
B)9257
C)7326
D)4816
E)2674

Question

Quizplus · Accepted Answer

The probability of more than 1 bankruptcy is calculated as 1 minus the probability of 0 or 1 bankruptcy. Using the Poisson formula, P(X > 1) = 1 - (P(X = 0) + P(X = 1)) = 1 - (e^(-2.6) * (2.6^0 / 0!) + e^(-2.6) * (2.6^1 / 1!)) = 0.7326.

A Local Bank Has Determined That the Number of Companies