A company in Hawaii manages properties for owners and arranges for the properties to be rented. A property owner who is considering using the company is told that 10% of the bookings result in a cancellation.
a. Assuming that the company’s number is correct, what is the probability that a random sample of 50 bookings ends up with 9 or more cancellations?
b. If an audit of 200 of the company’s bookings showed 25 cancellations, what might you conclude about the company’s 10% claim? Base your answer on probability.