Independent solution

How to solve this Independence question

Setup

Setup

Let p be the common one-period success probability and let q=1-p. The supplied two-period quantity is the probability of one success and one failure.

x=(21)pq=2pqx=\binom21pq=2pq

Model

Model

Independence makes the number of successes in four periods binomial. Exactly two successes can occupy any two of the four positions.

Pr(S4=2)=(42)p2q2=6p2q2\Pr(S_4=2)=\binom42p^2q^2=6p^2q^2

Compute

Compute

Replace the product pq by x/2 and simplify.

6p2q2=6(pq)2=6(x2)26p^2q^2=6(pq)^2=6\left(\frac{x}{2}\right)^2
Pr(S4=2)=32x2\Pr(S_4=2)=\frac32x^2

Answer

Answer

The four-period probability is one and one-half times the square of x.

1.5x2(D)\boxed{1.5x^2\quad\text{(D)}}