Bernoulli Trial

CFA Level I Quant
#1

I just go crazy with a sample question, please help me out of my misery:

A stock price rose in three of the previous four quarters; the probability of an increase in price is 65%. Based on the data collected and using a Bernoulli trial , the probability that the stock price will rise in three or fewer quarters is closest to: A. 3.1%. B. 27.5%. C. 42.2%.

Right is 3,1% but I don´t get why the calculation has to be like:

P(x) = (4 over 3) * P^4 * (1-p)^3 as the formula is stated as P(x)= (n over x) * p^x * (1-p)^n-x

#2

Not sure about this one given the answer choices, but here’s my take on the question.

Three or fewer is P(X =< 3) which is equal to 1-P(X = 4). Filling in the formula: (4 over 4) * 0.65^4 * 0.35^0 = 0.1785. 1-0.1785 = 0.8215 = 82,2%. Anyone else figured out what’s going on here?

#3

I agree with Moonborne - the question doesn’t seem to make sense as written (other than Moonborne’s interpretation).