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QUESTION

Loophole Accounting Services specializes in tax preparation for individual tax returns.

Loophole Accounting Services specializes in tax preparation for individual tax returns. Data collected from past records reveals that 9% of the returns prepared by Loophole have been selected for audit by the IRS. Today, Loophole has 7 new customers. Assume that the events that each of these customers being audited are independent.

What is the probability that none of these new customers will be selected for an audit?

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