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Question:

Exercise Statement: In Exercises (a) and (b), use the following information. A drug manufacturer claims that a drug cures a rare skin disease 75% of the time. The claim is checked by testing the drug on 100 patients. If at least 70 patients are cured, then this claim will be retained.

(a) Find the probability that the claim will be retained assuming that the manufacturer's claim is true.

(b) Find the probability that the claim will be rejected assuming that the actual probability that the drug cures the skin disease is 65%.