The Securities and Exchange Commission has determined that t

The Securities and Exchange Commission has determined that the number of companies listedon the NYSE declaring bankruptcy is approximately a Poisson distribution with a mean of 30 peryear. Find the probability that no more than 2 bankruptcy occurs next month.

Please include how you came up with the answer.

Thank you

Solution

the mean per month is 30/12=2.5

we need to find P(no more thn 2 bankruptc occurs next month)=P(x<=2)=P(x=0)+P(x=1)+P(x=2)

P(x<=2)=0.543813

this is calculated by using Poisson funciton in excel.