The Securities and Exchange Commission has determined that the number of companies listed in NYSE declaring bankruptcy is approximately a Poisson distribution with a mean of 2.6 per month. Find the probability that exactly 4 bankruptcies occur next month.
A).8774
B).1414
C).1557
D).2176

Question

Quizplus · Accepted Answer

The probability of observing exactly 4 bankruptcies next month can be calculated as:
P(X=4) = (e^-2.6)*(2.6^4)/(4!) = 0.1414
where X is the number of bankruptcies in a month, e is the base of the natural logarithm, and ! denotes the factorial function. Therefore, the correct choice is B).

The Securities and Exchange Commission Has Determined That the Number