Inland Revenue audits 5% of all companies every year. The companies selected for auditing in any one year are independent of the previous year’s selection.
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
Inland Revenue audits 5% of all companies every year. The companies selected for auditing in any one year are independent of the previous year’s selection.
i) What is the probability that the company ‘Ross Waste Disposal’ will be selected for auditing exactly twice in the next 5 years?
ii) What is the probability that the company will be audited exactly twice in the next 2 years?
iii) What is the exact probability that this company will be audited at least once in the next 4 years?
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