6. Suppose you are a broker (of junk bonds) who buys only bonds that have a 55% chance of not defaulting. Yo want to put together a portfolio of bonds with at least three that will not default. You want to be 95% sure ti at least three will not default. How many bonds should you buy?

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6. Suppose you are a broker (of junk bonds) who buys only bonds that have a 55% chance of not defaulting. You
want to put together a portfolio of bonds with at least three that will not default. You want to be 95% sure that
at least three will not default. How many bonds should you buy?
Ans.
Transcribed Image Text:6. Suppose you are a broker (of junk bonds) who buys only bonds that have a 55% chance of not defaulting. You want to put together a portfolio of bonds with at least three that will not default. You want to be 95% sure that at least three will not default. How many bonds should you buy? Ans.
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