A representative of a market research firm contacts consumers by phone in order to conduct surveys. The specific consumer contacted by each phone call is randomly determined. The probability that a phone call produces a completed survey is 0.25.
Calculate the probability that more than three phone calls are required to produce one completed survey.
Copyright 2023. The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.
Solution: B
For there to be more than three calls before one completed survey all that is required is the first three calls not result in a completed survey. This probability is (1 − 0.25)3 = 0.42.
Copyright 2023. The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.