There is a .02 probability that a customer's Visa charge will be rejected at a certain Target store because the transaction exceeds the customer's credit limit. What is the probability that the first such rejection occurs on the third Visa transaction?
A).0192
B).0025
C).0247
D).0200

Question

Quizplus · Accepted Answer

The probability that the first rejection occurs on the third transaction follows a geometric distribution. The probability is calculated as (1 - 0.02)^2 * 0.02 = 0.0192.

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