A manager randomly selected 25 large cash transactions at a
A manager randomly selected 25 large cash transactions at a bank that were made in January. The manager then carefully tracked down the details of these transactions to see that the correct procedures for reporting these large transactions were followed. This bank typically makes 1,500 such transactions monthly.
(a) Is it appropriate to use a binomial model in this situation?
(b) If the chance for a procedural error is 10%, is it likely that the manager finds more than two such transactions? For this component, argue informally, without computing the probability, from the characteristics of the binomial model.
(c) Find the probability in part (b).
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