For a certain class of junk bonds, the probability of default in a given year is 0.2. Whether one bond defaults is independent of whether another bond defaults. For a portfolio of five of these junk bonds, what is the probability that zero or one bond of the five defaults in the year ahead?（ ）
The outcome follows a binomial distribution where n=5 and p=0.2. In this case p(0)=0.85= 0.3277 and p(1)=5×0.84×0.2=0.4096, so P(X=0 or X=1)= 0.3277+0.4096.