Calculating binomial probabilities using excel

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Calculating binomial probabilities using excel

  1. 1. CALCULATING BINOMIAL PROBABILITIES USING EXCELEXAMPLE: The American Society of Investors survey found 30 percent of individual investors have used adiscount broker. In a random sample of nine individuals, what is the probability that exactly two of thesampled individuals have used a discount broker? 1. Click on Formula in Tool Bar 2. Click on Insert Function 3. Type binomdist in search window, click GO 4. Click on BINOMDIST 5. Click OK(continued on next page)
  2. 2. Type 2 in numbers_s window (looking for the probability that exactly two used a discount broker)Type 9 in the Trials window (nine individuals were surveyed)Type .3 in the Probability_s window (probability of individual investors using discount broker)Type False in Cumulative window (we are not looking for a cumulative percentage)Answer: There is a 27% chance that exactly two of the nine individuals surveyed will have used a discountbroker

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