A list of important customers contains 25 names Among them 2

A list of important customers contains 25 names. Among them, 20 people have their accounts in good standing while 5 are delinquent. Two people will be selected at random from this list and the status of their accounts checked.

Solution

Let X be the no of customers who have delinquent accounts.

p = Probability for one success = 5/25 = 0.20

Sample size = 2

X no of delinquent customers in this sample can take values 0,1,2

Pdf is binomial

as P(X=r) = 2Cr(0.2)^r(0.8)^2-r, r =0,1,2