A stock portfolio contains 20 stocks. Of these stocks, 10 are ...

[jlmhmf]

A stock portfolio contains 20 stocks. Of these stocks, 10 are considered large-cap stocks, 5 are mid-cap, and 5 are small cap. The portfolio manager has been asked by his client to develop a report that highlights 7 ran
 
  When she presents her report to the client, all 7 of the stocks are large-cap stocks. The client is very suspicious that the manager has not randomly selected the stocks. She believes that the chances of all 7 of the stocks being large cap must be very low. Compute the probability of all 7 being large cap.A) 0.0015
  B) 0.0008
  C) 0.0121
  D) 0.0309

Question 2

The Weyerhauser Lumber Company headquartered in Tacoma, Washington, is one of the largest timber and wood product companies in the world. Weyerhauser manufactures plywood at one of its Oregon plants.
 
  Plywood contains minor imperfections that can be repaired with small plugs. One customer will accept plywood with a maximum of 3.5 plugs per sheet on average. Suppose a shipment was sent to this customer and when the customer inspected two sheets at random, 10 plugged defects were counted. What is the probability of observing 10 or more plugged defects if in fact the 3.5 average per sheet is being satisfied?A) 0.1887
  B) 0.1695
  C) 0.2115
  D) 0.2675

[emily12345]

Answer to Question 1

A

Answer to Question 2

B