Audio Sounds runs a chain of stores selling stereo systems and components. It has been very successful in many university towns, but it has had some failures. Analysis of its failures has led it to adopt a policy of not opening a store unless it can be reasonably certain that more than 15 percent of the students in town own stereo systems costing $1,100 or more. A survey of 300 of the 2,400 students at a small, liberal arts college in the Midwest has discovered that 57 of them own stereo systems costing at least $1,100. If Audio Sounds is willing to run a 5 percent risk of failure, should it open a store in this town?
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