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You decide to assess an analysts ability to forecast the sufficiency of earnings over a 20-quarter period. Over that time, the analyst correctly predicted earnings
You decide to assess an analysts ability to forecast the sufficiency of earnings over a 20-quarter period. Over that time, the analyst correctly predicted earnings 14 times and incorrectly predicted earnings 6 times. You decide to model the correctness of his predictions using the binomial distribution. Assuming the estimated probability is the actual probability, what is the standard deviation of "correctness" if the analyst will make earnings predictions over the next two years? Hint: the variance of a binomial distribution equals npq.
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