Fraud detection has become an indispensable tool for banks and credit card companies to combat fraudulent credit card transactions. A fraud detection firm has detected minor fraudulent activities in 1.40% of transactions, and serious fraudulent activities in 0.95% of transactions. Assume that fraudulent transactions remain stable. a. What is the probability that there are minor fraudulent activities in fewer than 2 out of 100 transactions? Note: Do not round intermediate calculations. Round your final answer to 4 decimal places. Probability b. What is the probability that there are serious fraudulent activities in fewer than 2 out of 100 transactions? Note: Do not round intermediate calculations. Round your final answer to 4 decimal places. Probability
Fraud detection has become an indispensable tool for banks and credit card companies to combat fraudulent credit card transactions. A fraud detection firm has detected minor fraudulent activities in 1.40% of transactions, and serious fraudulent activities in 0.95% of transactions. Assume that fraudulent transactions remain stable. a. What is the probability that there are minor fraudulent activities in fewer than 2 out of 100 transactions? Note: Do not round intermediate calculations. Round your final answer to 4 decimal places. Probability b. What is the probability that there are serious fraudulent activities in fewer than 2 out of 100 transactions? Note: Do not round intermediate calculations. Round your final answer to 4 decimal places. Probability
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Fraud detection has become an indispensable tool for banks and credit card companies to combat fraudulent credit card transactions.
A fraud detection firm has detected minor fraudulent activities in 1.40% of transactions, and serious fraudulent activities in 0.95% of
transactions. Assume that fraudulent transactions remain stable.
a. What is the probability that there are minor fraudulent activities in fewer than 2 out of 100 transactions?
Note: Do not round intermediate calculations. Round your final answer to 4 decimal places.
Probability
b. What is the probability that there are serious fraudulent activities in fewer than 2 out of 100 transactions?
Note: Do not round intermediate calculations. Round your final answer to 4 decimal places.
Probability
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