You can be expected to recognize a Binomial Distribution and calculate Binomial Probabilities.

Recognize:

n = 12

p = 1/40= Probability of Fault Under Guarantee

q = 1-p = 39/40

Calculate:

You do Pr(2).

Note: Pr(2) is just for practice. You don't need it to answer the question, since Pr(2 or more) = 1 - Pr(0) - Pr(1)