MATH 1101 Applied Probability & Statistics Final Exam Review Q & A 2026 (Complete And Verified Study material) (14pages) LEARNEXAMS

1. An accounting firm is auditing a company's financial records. If the probability of finding an error in any given transaction is 0.1, what is the probability of finding at least one error in a random sample of 20 transactions? A) 0.121 B) 0.878 C) 0.264 D) 0.736 Answer: D) 0.736 Rationale: This question requires understanding of the binomial probability distribution. The probability of finding at least one error is the complement of finding no errors in all 20 transactions. Calculated as 1 - (0.9)^20. 2. A portfolio manager is analyzing the returns of two independent investments. If the probability that investment A will yield a positive return is 0.7 and investment B is 0.8, what is the probability that both investments will yield a positive return? A) 0.56 B) 0.14 C) 0.64 D) 0.46 Answer: A) 0.56 Rationale: Since the two investments are independent, the probability of both events occurring is the product of their individual probabilities. Calculated as 0.7 * 0.8. 3. During a fiscal year, an accountant observes that the number of tax returns filed follows a Poisson distribution with an average rate of 2 returns per hour. What is the probability that exactly three tax returns will be filed in a given hour? A) 0.180 B) 0.224 C) 0.857 D) 0.080 Answer: B) 0.224 Rationale: The Poisson distribution gives the probability of a number of events occurring in a fixed interval of time. The probability of exactly