
Explanation:
We note the following:
I. New clients are received randomly at a rate of 2 per unit time (month)
II. Each event is independent
These observations confirm the Poisson distribution.
Since the question asks us to find a yearly probability, we must convert the monthly Poisson rate to an equivalent yearly rate.
Poi(1) monthly distribution is equivalent to Poi(12) yearly.
Now, if X stands for the number of clients received,
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Q.49 Luke Friday, FRM, runs a consultancy firm that offers investment advice to clients around Los Angeles. The number of clients the firm receives in a month is distributed as a Poisson variable with a mean of 1. What is the probability that the firm receives exactly 5 new clients in a year, assuming every client is independent?
A
0.98725
B
0.02034
C
0.01274
D
0.00760
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