SOLUTION: An oil drilling company ventures into various locations, and their success or failure is
independent from one location to another. Suppose the probability of a success at any
spe
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independent from one location to another. Suppose the probability of a success at any
spe
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Question 98164: An oil drilling company ventures into various locations, and their success or failure is
independent from one location to another. Suppose the probability of a success at any
specific location is 0.25.
i) What is the probability that a driller drills 10 locations and finds 1 success?
ii) The driller feels that he will go bankrupt if he drills 10 times before the first
success occurs. What are the driller’s prospects for bankruptcy? Answer by stanbon(75887) (Show Source):
You can put this solution on YOUR website! Suppose the probability of a success at any
specific location is 0.25.
i) What is the probability that a driller drills 10 locations and finds 1 success?
P(one success in 10) = (10C1)(0.25)^1(0.75)^9 = 0.1877...
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ii) The driller feels that he will go bankrupt if he drills 10 times before the first success occurs. What are the driller’s prospects for bankruptcy?
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P(no success in 10 trials) = 0.75^10 = 0.0563...
Chances are 563 in 10000 that he will go bankrupt.
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Cheers,
Stan H.
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