1. If a sample of 50 prospective customers is selected and no free premium channels are included in the 3- For- All service offer, given past results, what is the probability that a. fewer than 3 customers will subscribe to the 3- For- All service offer? b. 0 customers or 1 customer will subscribe to the 3- For- All service offer? c. more than 4 customers will subscribe to the 3- For- All service offer? d. Suppose that in the actual survey of 50 prospective customers, 4 customers subscribe to the 3- For- All service offer. What does this tell you about the previous estimate of the proportion of customers who would subscribe to the 3- For- All service offer?

2. Instead of offering no premium free channels as in Problem 1, suppose that two free premium channels are included in the 3- For- All service offer. Given past results, what is the probability that a. fewer than 3 customers will subscribe to the 3- For- All service offer? b. 0 customers or 1 customer will subscribe to the 3- For- All service offer? c. more than 4 customers will subscribe to the 3- For- All service offer? d. Compare the results of (a) through (c) to those of 1. e. Suppose that in the actual survey of 50 prospective customers, 6 customers subscribe to the 3- For- All service offer. What does this tell you about the pervious estimate of the proportion of customers who would subscribe to the 3- For- All service offer? f. What do the results in (e) tell you about the effect of offering free premium channels on the likelihood of obtaining subscriptions to the 3- For- All service?

3. Suppose that additional surveys of 50 prospective customers were conducted in which the number of free premium channels was varied. The result were as follows:

Number of Free Premium                Channels Number of Subscriptions

1………………………………………………… 5

3………………………………………………..  6

4……………………………………………….. 6

5……………………………………………….. 7

How many free premium channels should the research director recommend for inclusion in the 3- For- All service? Explain.