Binomial Distribution | CFA® Level 1 Exam | Test Prep

Binomial Distribution

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Question

Which is true for a binomial distribution?

Answers

Explanations

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A. B. C. D. E.

C

The probability of success is a constant in a binomial distribution.

The correct answer for the question regarding a binomial distribution is option C: "Probability of success remains the same from trial to trial."

A binomial distribution is a discrete probability distribution that describes the number of successful outcomes in a fixed number of independent Bernoulli trials, where each trial has only two possible outcomes: success or failure. In a binomial distribution, the probability of success (often denoted as "p") remains constant from trial to trial.

Let's break down the given options:

A. All of these answers are correct: This is not the correct answer since at least one of the other options is not true.

B. Value of p is equal to 1.50: This option is not correct because the probability of success (p) in a binomial distribution must be between 0 and 1. It represents the likelihood of a single trial resulting in a success.

C. Probability of success remains the same from trial to trial: This is the correct answer. In a binomial distribution, the probability of success (p) is constant across all trials. For example, if you are flipping a fair coin, the probability of getting heads remains the same for each flip, assuming the coin is unbiased.

D. There are three or more possible outcomes: This option is not correct because a binomial distribution involves only two possible outcomes: success or failure. It does not include three or more outcomes.

E. None of these answers are correct: This option is not correct because option C is indeed true for a binomial distribution.

Therefore, the correct answer is C: "Probability of success remains the same from trial to trial."