Forty-four percent of consumers with credit cards carry balances from month to month. Four consumers with credit cards are randomly selected. What is the probability that all consumers carry a credit card balance?
A) 0.1015
B) 0.0375
C) 0.3133
D) 0.1390

Question

Quizplus · Accepted Answer

The probability that all four consumers carry a credit card balance is found by multiplying the individual probabilities together since each selection is independent. Given that 44% (or 0.44) of consumers carry balances, the probability for all four is $0.44 \times 0.44 \times 0.44 \times 0.44 = 0.0375$.

Forty-Four Percent of Consumers with Credit Cards Carry Balances from Month