1)
here this is binomial distribution with paramter n=5 and p=0.6
i)P(X=2)=5C2(0.6)2(0.4)3 =0.2304
ii) P(X>=1)=1-P(X=0)=1-5C0(0.6)0(0.4)5 =1-0.0102=0.9898
iii)P(X=4|X>=1)=P(X=4)/P(X>=1)=5C4(0.6)4(0.4)1/0.9898 =0.2592/0.9898=0.2619
b)
here parameter =3
i)P(X=4)=e-x/x! =e-334/4! =0.1680
ii)expected strike in 6 months =3/2 =1.5
P(next strike in less then 6 months)=1-P(no strike in 6 months)=1-e-1.5*1.50/0! =1-0.2231=0.7769
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