Using the binomial distribution, it is found that there is a 0.04 = 4% probability that both the stocks in your selection had yields of 3.25% or more.
For each stock, there are only two possible outcomes, either it yields 3.25% of more, or it does not. The probability of an stock yielding 3.25% or more is independent of any other stock, which means that the binomial distribution is used to solve this question.
Binomial probability distribution
[tex]P(X = x) = C_{n,x}.p^{x}.(1-p)^{n-x}[/tex]
[tex]C_{n,x} = \frac{n!}{x!(n-x)!}[/tex]
The parameters are:
In this problem:
The probability of both is P(X = 2), hence:
[tex]P(X = x) = C_{n,x}.p^{x}.(1-p)^{n-x}[/tex]
[tex]P(X = 2) = C_{2,2}.(0.2)^{2}.(0.8)^{0} = 0.04[/tex]
0.04 = 4% probability that both the stocks in your selection had yields of 3.25% or more.
A similar problem is given at https://brainly.com/question/24863377
