Reading 4 Common Probability Distributions

Question #1 of 96 Question ID: 1456450
For a continuous uniform distribution that can take on values only between 2 and 10, the
probability of an outcome:
A) equal to 4 is 11.1%.
B) less than 3 is 12.5%.
C) greater than 5 is 27.5%.
Which of the following statements about probability distributions is least accurate?
A probability distribution includes a listing of all the possible outcomes of an

A)
experiment.
In a binomial distribution each observation has only two possible outcomes that are
B)
mutually exclusive.
C) A probability distribution is, by definition, normally distributed.
Which of the following portfolios provides the optimal "safety first" return if the minimum
acceptable return is 9%?
Portfolio Expected Return (%) Standard Deviation (%)
1 13 5
2 11 3
3 9 2
A) 2.
B) 3.
C) 1.
A random variable with which of the following probability distributions will have the greatest
probability of an outcome more than two standard deviations from the mean?
A) Student’s t-distribution with 18 degrees of freedom.

B) Student’s t-distribution with 15 degrees of freedom.
C) Standard normal distribution.
A casual laborer has a 70% probability of finding work on each day that she reports to the
day labor marketplace. What is the probability that she will work three days out of five?
A) 0.3087.
B) 0.3192.
C) 0.6045.
Multivariate distributions can describe:
A) discrete random variables only.

B) continuous random variables only.
C) either discrete or continuous random variables.

Which of the following statements describes a limitation of Monte Carlo simulation?
A) Outcomes of a simulation can only be as accurate as the inputs to the model.

Simulations do not consider possible input values that lie outside historical
B)
experience.
Variables are assumed to be normally distributed but may actually have non-normal
C)
distributions.
A stock portfolio has had a historical average annual return of 12% and a standard deviation
of 20%. The returns are normally distributed. The range –27.2 to 51.2% describes a:
A) 68% confidence interval.

B) 99% confidence interval.
C) 95% confidence interval.
With 60 observations, what is the appropriate number of degrees of freedom to use when
carrying out a statistical test on the mean of a population?
A) 59.
B) 60.
C) 61.
A random variable X is continuous and bounded between zero and five, X:(0 ≤ X ≤ 5). The
cumulative distribution function (cdf) for X is F(x) = x / 5. Calculate P(2 ≤ X ≤ 4).
A) 1.00.
B) 0.50.
C) 0.40.
A grant writer for a local school district is trying to justify an application for funding an after-
school program for low-income families. Census information for the school district shows an
average household income of $26,200 with a standard deviation of $8,960. Assuming that
the household income is normally distributed, what is the percentage of households in the
school district with incomes of less than $12,000?
A) 15.87%.
B) 5.71%.
C) 9.92%.
If a stock decreases from $90 to $80, the continuously compounded rate of return for the
period is:
A) -0.1000.
B) -0.1250.
C) -0.1178.
The probability that a normally distributed random variable will be more than two standard
deviations above its mean is:
A) 0.4772.
B) 0.0228.
C) 0.9772.
If random variable Y follows a lognormal distribution then the natural log of Y must be:
A) lognormally distributed.
B) normally distributed.
C) denoted as ex.
In a normal distribution, the:
A) median equals the mode.

B) skew is positive.
C) kurtosis is 4.
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?
A) 0.7373.
B) 0.0819.
C) 0.4096.

Expected returns and standard deviations of returns for three portfolios are shown in the
following table:
Portfolio Expected Return Standard Deviation
1 9% 5%
2 8% 4%
3 7% 3%
Assuming the risk-free rate is 3%, an investor who wants to minimize the probability of
returns less than 5% should choose:
A) Portfolio 2.
B) Portfolio 1.
C) Portfolio 3.
Which of the following statements about a normal distribution is least accurate?
Approximately 34% of the observations fall within plus or minus one standard
A)
deviation of the mean.
B) Kurtosis is equal to 3.
C) The distribution is completely described by its mean and variance.
A food retailer has determined that the mean household income of her customers is
$47,500 with a standard deviation of $12,500. She is trying to justify carrying a line of luxury
food items that would appeal to households with incomes greater than $60,000. Based on
her information and assuming that household incomes are normally distributed, what
percentage of households in her customer base has incomes of $60,000 or more?
A) 15.87%.
B) 2.50%.
C) 5.00%.
A stock increased in value last year. Which will be greater, its continuously compounded or
its holding period return?
A) Its continuously compounded return.

B) Its holding period return.
C) Neither, they will be equal.
An investment has an expected return of 10% with a standard deviation of 5%. If the returns
are normally distributed, the probability of losing money is closest to:
A) 16.0%.
B) 5.0%.
C) 2.5%.

Standard Normal Distribution
P(Z ≤ z) = N(z) for z ≥ 0
z 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09
0.5 0.6915 0.6950 0.6985 0.7019 0.7054 0.7088 0.7123 0.7157 0.7190 0.7224
0.6 0.7257 0.7291 0.7324 0.7357 0.7389 0.7422 0.7454 0.7486 0.7517 0.7549
0.7 0.7580 0.7611 0.7642 0.7673 0.7704 0.7734 0.7764 0.7794 0.7823 0.7852
0.8 0.7881 0.7910 0.7939 0.7967 0.7995 0.8023 0.8051 0.8078 0.8106 0.8133
0.9 0.8159 0.8186 0.8212 0.8238 0.8264 0.8289 0.8315 0.8340 0.8365 0.8389
1.0 0.8413 0.8438 0.8461 0.8485 0.8508 0.8531 0.8554 0.8577 0.8599 0.8621
1.1 0.8643 0.8665 0.8686 0.8708 0.8729 0.8749 0.8770 0.8790 0.8810 0.8830
1.2 0.8849 0.8869 0.8888 0.8907 0.8925 0.8944 0.8962 0.8980 0.8997 0.9015
1.3 0.9032 0.9049 0.9066 0.9082 0.9099 0.9115 0.9131 0.9147 0.9162 0.9177
1.4 0.9192 0.9207 0.9222 0.9236 0.9251 0.9265 0.9279 0.9292 0.9306 0.9319
Given a normally distributed population with a mean income of $40,000 and standard
deviation of $7,500, what percentage of the population makes between $30,000 and
$35,000?
A) 15.96.
B) 13.34.
C) 41.67.
A random variable that has a countable number of possible values is best described as a:
A) discrete random variable.

B) probability distribution.
C) continuous random variable.
Question #24 of 96
Which of the following is NOT an assumption of the binomial distribution?
A) Random variable X is discrete.

B) The expected value is a whole number.
C) The trials are independent.
In a multivariate normal distribution, a correlation tells the:
A) overall relationship between all the variables.

B) relationship between the means and variances of the variables.
C) strength of the linear relationship between two of the variables.
Which of the following is least likely to be an example of a discrete random variable?
A) The number of days of sunshine in the month of May 2006 in a particular city.
B) The rate of return on a real estate investment.
C) Quoted stock prices on the NASDAQ.
A multivariate distribution is best defined as describing the behavior of:
A) a random variable with more than two possible outcomes.

B) two or more independent random variables.
C) two or more dependent random variables.
Which one of the following statements about the t-distribution is most accurate?
A) The t-distribution is positively skewed.

B) The t-distribution has thinner tails compared to the normal distribution.
The t-distribution approaches the standard normal distribution as the degrees of
C)
freedom increase.
Which of the following statements about probability distributions is least accurate?
A) The skewness of a normal distribution is zero.

A binomial probability distribution is an example of a continuous probability
B)
distribution.
A discrete random variable is a variable that can assume only certain clearly
C)
separated values resulting from a count of some set of items.
Cumulative Z-Table
z 0.04 0.05
1.8 0.9671 0.9678
1.9 0.9738 0.9744
2.0 0.9793 0.9798
2.1 0.9838 0.9842
The owner of a bowling alley determined that the average weight for a bowling ball is 12
pounds with a standard deviation of 1.5 pounds. A ball denoted "heavy" should be one of
the top 2% based on weight. Assuming the weights of bowling balls are normally distributed,
at what weight (in pounds) should the "heavy" designation be used?
A) 14.00 pounds.
B) 14.22 pounds.
C) 15.08 pounds.
Segment of the table of critical values for Student's t-distribution:
Level of Significance for a One-Tailed Test
df 0.050 0.025
Level of Significance for a Two-Tailed Test
df 0.10 0.05
28 1.701 2.048
29 1.699 2.045
30 1.697 2.042
40 1.684 2.021
For a t-distributed test statistic with 30 degrees of freedom, a one-tailed test specifying the
parameter greater than some value and a 95% confidence level, the critical value is:
A) 1.684.
B) 1.697.
C) 2.042.
Assume 30% of the CFA candidates have a degree in economics. A random sample of three
CFA candidates is selected. What is the probability that none of them has a degree in
economics?
A) 0.027.
B) 0.343.
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C) 0.900.
Consider a random variable X that follows a continuous uniform distribution: 7 ≤ X ≤ 20.

Which of the following statements is least accurate?
A) F(12 ≤ X ≤ 16) = 0.307.

B) F(21) = 0.00.
C) F(10) = 0.23.
A stock portfolio's returns are normally distributed. It has had a mean annual return of 25%
with a standard deviation of 40%. The probability of a return between -41% and 91% is
closest to:
A) 65%.
B) 90%.
C) 95%.
The mean return of a portfolio is 20% and its standard deviation is 4%. The returns are
normally distributed. Which of the following statements about this distribution are least
accurate? The probability of receiving a return:
A) of less than 12% is 0.025.

B) in excess of 16% is 0.16.
C) between 12% and 28% is 0.95.
Which of the following qualifies as a cumulative distribution function?
A) F(1) = 0, F(2) = 0.25, F(3) = 0.50, F(4) = 1.

B) F(1) = 0, F(2) = 0.5, F(3) = 0.5, F(4) = 0.
C) F(1) = 0.5, F(2) = 0.25, F(3) = 0.25, F(4) – 1.
For a random variable defined over the interval 0 to 1 that has a cumulative distribution
function of F(x) = x3, the probability of an outcome between 20% and 70% is closest to:
A) 1/4.
B) 1/3.
C) 1/2.
One of the major limitations of Monte Carlo simulation is that it:
A) cannot provide the insight that analytic methods can.

B) does not lend itself to performing “what if” scenarios.
C) requires that variables be modeled using the normal distribution.

The mean and standard deviation of returns for three portfolios are listed below in
percentage terms.
Portfolio X: Mean 5%, standard deviation 3%.
Portfolio Y: Mean 14%, standard deviation 20%.
Portfolio Z: Mean 19%, standard deviation 28%.
Using Roy's safety-first criteria and a threshold of 4%, select the optimal portfolio.
A) Portfolio X.
B) Portfolio Y.
C) Portfolio Z.
The probability density function of a continuous uniform distribution is best described by a:
A) line segment with a 45-degree slope.

B) horizontal line segment.
C) line segment with a curvilinear slope.
The cumulative distribution function for a random variable X is given in the following table:
x F(x)
5 0.15
10 0.30
15 0.45
20 0.75
25 1.00
The probability of an outcome greater than 15 is:

A) 75%.
B) 45%.
C) 55%.
The continuously compounded rate of return that will generate a one-year holding period
return of -6.5% is closest to:
A) -5.7%.
B) -6.3%.
C) -6.7%.
Which of the following random variables would be most likely to follow a discrete uniform
distribution?
A) The number of heads on the flip of two coins.

The outcome of a roll of a standard, six-sided die where X equals the number facing
B)
up on the die.
The outcome of the roll of two standard, six-sided dice where X is the sum of the
C)
numbers facing up.
Which of the following statements about the normal probability distribution is most
accurate?
Sixty-eight percent of the area under the normal curve falls between the mean and
A)
1 standard deviation above the mean.
B) The normal curve is asymmetrical about its mean.
Five percent of the normal curve probability is more than two standard deviations
C)
from the mean.
A multivariate distribution:
A) applies only to binomial distributions.

B) gives multiple probabilities for the same outcome.
C) specifies the probabilities associated with groups of random variables.
A stock that pays no dividend is currently priced at €42.00. One year ago the stock was
€44.23. The continuously compounded rate of return is closest to:
A) –5.04%.
B) +5.17%.
C) –5.17%.
The average amount of snow that falls during January in Frostbite Falls is normally
distributed with a mean of 35 inches and a standard deviation of 5 inches. The probability
that the snowfall amount in January of next year will be between 40 inches and 26.75 inches
is closest to:
A) 68%.
B) 79%.
C) 87%.
A lognormal distribution is least likely to be:
A) negatively skewed.
B) used to model stock prices.
C) bounded below by zero.
Given a holding period return of R, the continuously compounded rate of return is:
A) eR – 1.
B) ln(1 + R).
C) ln(1 + R) – 1.
A normal distribution can be completely described by its:
A) mean and mode.

B) mean and variance.
C) skewness and kurtosis.
A multivariate normal distribution that includes three random variables can be completely
described by the means and variances of each of the random variables and the:
A) correlation coefficient of the three random variables.

B) correlations between each pair of random variables.
C) conditional probabilities among the three random variables.
An investment has a mean return of 15% and a standard deviation of returns equal to 10%.
If returns are normally distributed, which of the following statements is least accurate? The
probability of obtaining a return:
A) greater than 25% is 0.32.

B) greater than 35% is 0.025.
C) between 5% and 25% is 0.68.
Possible outcomes for a discrete uniform distribution are the integers 2 to 9 inclusive. What
is the probability of an outcome less than 5?
A) 50.0%.
B) 62.5%.
C) 37.5%.
A cumulative distribution function for a random variable X is given as follows:
x F(x)
5 0.14
10 0.25
15 0.86
20 1.00
The probability of an outcome less than or equal to 10 is:
A) 14%.
B) 39%.
C) 25%.
Which of the following portfolios provides the best "safety first" ratio if the minimum
acceptable return is 6%?
Portfolio Expected Return (%) Standard Deviation (%)
1 13 5
2 11 3
3 9 2
A) 3.
B) 2.
C) 1.
Standard Normal Distribution
P(Z ≤ z) = N(z) for z ≥ 0
z 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09
0.6 0.7257 0.7291 0.7324 0.7357 0.7389 0.7422 0.7454 0.7486 0.7517 0.7549
0.7 0.7580 0.7611 0.7642 0.7673 0.7704 0.7734 0.7764 0.7794 0.7823 0.7852
0.8 0.7881 0.7910 0.7939 0.7967 0.7995 0.8023 0.8051 0.8078 0.8106 0.8133
0.9 0.8159 0.8186 0.8212 0.8238 0.8264 0.8289 0.8315 0.8340 0.8365 0.8389
John Cupp, CFA, has several hundred clients. The values of the portfolios Cupp manages are
approximately normally distributed with a mean of $800,000 and a standard deviation of
$250,000. The probability of a randomly selected portfolio being in excess of $1,000,000 is:
A) 78.81%.
B) 17.36%.
C) 21.19%.
If X has a normal distribution with μ = 100 and σ = 5, then there is approximately a 90%
probability that:
A) P(90.2 < X < 109.8).

B) P(91.8 < X < 108.3).
C) P(93.4 < X < 106.7).
If a random variable x is lognormally distributed then ln x is:
A) abnormally distributed.
B) defined as ex.
C) normally distributed.
The annual rainfall amount in Yucutat, Alaska, is normally distributed with a mean of 150
inches and a standard deviation of 20 inches. The 90% confidence interval for the annual
rainfall in Yucutat is closest to:
A) 137 to 163 inches.

B) 117 to 183 inches.
C) 110 to 190 inches.
A portfolio manager is looking at an investment that has an expected annual return of 10%
with a standard deviation of annual returns of 5%. Assuming the returns are approximately
normally distributed, the probability that the return will exceed 20% in any given year is
closest to:
A) 0.0%.
B) 2.28%.
C) 4.56%.
Which of the following distributions can only take on positive values?
A) F-distribution.
B) Normal distribution.
C) Student’s t-distribution.
A probability distribution is least likely to:
A) contain all the possible outcomes.

B) have only non-negative probabilities.
C) give the probability that the distribution is realistic.
Approximately 95% of all observations for a normally distributed random variable fall in the
interval:
A) µ ± 3σ.
B) µ ± 2σ.
C) µ ± σ.
There is an 80% probability of rain on each of the next six days. What is the probability that
it will rain on exactly two of those days?
A) 0.15364.
B) 0.01536.
C) 0.24327.
The mean and standard deviation of returns on three portfolios are listed below in
percentage terms:
Portfolio X: Mean 5%, standard deviation 3%.

Portfolio Y: Mean 14%, standard deviation 20%.
Portfolio Z: Mean 19%, standard deviation 28%.
Using Roy's safety first criteria and a threshold of 3%, which of these is the optimal portfolio?
A) Portfolio X.
B) Portfolio Z.
C) Portfolio Y.

A group of investors wants to be sure to always earn at least a 5% rate of return on their
investments. They are looking at an investment that has a normally distributed probability
distribution with an expected rate of return of 10% and a standard deviation of 5%. The
probability of meeting or exceeding the investors' desired return in any given year is closest
to:
A) 98%.
B) 84%.
C) 34%.
Cumulative z-table:
z 0.00 0.01 0.02 0.03
1.6 0.9452 0.9463 0.9474 0.9484
1.7 0.9554 0.9564 0.9573 0.9582
1.8 0.9641 0.9649 0.9656 0.9664
Monthly sales of hot water heaters are approximately normally distributed with a mean of
21 and a standard deviation of 5. What is the probability of selling 12 hot water heaters or
less next month?
A) 1.80%.
B) 96.41%.
C) 3.59%.

An investor is considering investing in one of the following three portfolios:
Statistical Measures Portfolio X Portfolio Y Portfolio Z
Expected annual return 12% 17% 22%
Standard deviation of return 14% 20% 25%
If the investor's minimum acceptable return is 5%, the optimal portfolio using Roy's safety-
first criterion is:
A) Portfolio Z.
B) Portfolio Y.
C) Portfolio X.
A normal distribution is completely described by its:
A) mean, mode, and skewness.

B) variance and mean.
C) median and mode.
Which of the following would least likely be categorized as a multivariate distribution?
A) The return of a stock and the return of the DJIA.

B) The days a stock traded and the days it did not trade.
C) The returns of the stocks in the DJIA.

A stated interest rate of 9% compounded continuously results in an effective annual rate
closest to:
A) 9.20%.
B) 9.42%.
C) 9.67%.
A normal distribution has a mean of 10 and a standard deviation of 4. Which of the following
statements is most accurate?
A) 81.5% of all the observations will fall between 6 and 18.

B) The probability of finding an observation below 2 is 5%.
C) The probability of finding an observation at 14 or above is 32%.
A discount brokerage firm states that the time between a customer order for a trade and the
execution of the order is uniformly distributed between three minutes and fifteen minutes.
If a customer orders a trade at 11:54 A.M., what is the probability that the order is executed
after noon?
A) 0.500.
B) 0.250.
C) 0.750.
In addition to the usual parameters that describe a normal distribution, to completely

describe 10 random variables, a multivariate normal distribution requires knowing the:
A) 45 correlations.
B) 10 correlations.
C) overall correlation.
For a binomial random variable with a 40% probability of success on each trial, the expected
number of successes in 12 trials is closest to:
A) 5.6.
B) 4.8.
C) 7.2.
A dealer in a casino has rolled a five on a single die three times in a row. What is the
probability of her rolling another five on the next roll, assuming it is a fair die?
A) 0.167.
B) 0.200.
C) 0.001.
A client will move his investment account unless the portfolio manager earns at least a 10%
rate of return on his account. The rate of return for the portfolio that the portfolio manager
has chosen has a normal probability distribution with an expected return of 19% and a
standard deviation of 4.5%. What is the probability that the portfolio manager will keep this
account?
A) 0.750.
B) 0.950.
C) 0.977.
The t-distribution is appropriate for constructing confidence intervals based on small

samples from a population with:
A) unknown variance and a normal distribution.

B) known variance and a non-normal distribution.
C) unknown variance and a non-normal distribution.
For an F-distribution where both chi-square random variables are based on a sample size of
10, the degrees of freedom in the numerator are:
A) 19.
B) 8.
C) 9.
Three portfolios with normally distributed returns are available to an investor who wants to
minimize the probability that the portfolio return will be less than 5%. The risk and return
characteristics of these portfolios are shown in the following table:
Portfolio Expected return Standard deviation
Epps 6% 4%
Flake 7% 9%
Grant 10% 15%
Based on Roy's safety-first criterion, which portfolio should the investor select?
A) Grant.
B) Flake.
C) Epps.
If X follows a continuous uniform distribution over the interval 1 < X < 26, the probability that
X is between 5 and 15 is closest to:
A) 10%.
B) 40%.
C) 60%.
The number of days a particular stock increases in a given five-day period is uniformly
distributed between zero and five inclusive. In a given five-day trading week, what is the
probability that the stock will increase exactly three days?
A) 0.167.
B) 0.333.
C) 0.600.
Which statement best describes the properties of Student's t-distribution? The t-distribution
is:
A) symmetrical, and defined by a single parameter.

B) symmetrical, and defined by two parameters.
C) skewed, and defined by a single parameter.
Question #84 of 96 Q i ID 1456482

Standardizing a normally distributed random variable requires the:
A) mean, variance and skewness.

B) natural logarithm of X.
C) mean and the standard deviation.
Bill Phillips is developing a Monte Carlo simulation to value a complex and thinly traded
security. Phillips wants to model one input variable to have negative skewness and a second
input variable to have positive excess kurtosis. In a Monte Carlo simulation, Phillips can
appropriately use:
A) only one of these variables.

B) neither of these variables.
C) both of these variables.
Which of the following is least likely a probability distribution?
A) Flip a coin: P(H) = P(T) = 0.5.

B) Roll an irregular die: p(1) = p(2) = p(3) = p(4) = 0.2 and p(5) = p(6) = 0.1.
C) Zeta Corp.: P(dividend increases) = 0.60, P(dividend decreases) = 0.30.
As degrees of freedom increase, the Chi-square and F-distributions most likely become
more:
A) negative.
B) asymmetric.
C) bell shaped.
A random variable follows a continuous uniform distribution over 27 to 89. What is the
probability of an outcome between 34 and 38?
A) 0.0546.
B) 0.0645.
C) 0.0719.
For a given stated annual rate of return, compared to the effective rate of return with
discrete compounding, the effective rate of return with continuous compounding will be:
A) higher.
B) the same.
C) lower.
For a Chi-square distribution with a sample size of 10 the degrees of freedom are:
A) 10.
B) 9.
C) 8.

Over a period of one year, an investor's portfolio has declined in value from 127,350 to
108,427. What is the continuously compounded rate of return?
A) -13.84%.
B) -16.09%.
C) -14.86%.
The lower limit of a normal distribution is:
A) negative one.
B) zero.
C) negative infinity.
Which of the following statements about a normal distribution is least accurate?
Approximately 68% of the observations lie within +/- 1 standard deviation of the
A)
mean.
B) The mean and variance completely define a normal distribution.
C) A normal distribution has excess kurtosis of three.
Monte Carlo simulation is necessary to:
A) approximate solutions to complex problems.

B) compute continuously compounded returns.
C) reduce sampling error.
Which of the following statements regarding the distribution of returns used for asset
pricing models is most accurate?
Lognormal distribution returns are used for asset pricing models because they will
A)
not result in an asset return of less than -100%.
Lognormal distribution returns are used because this will allow for negative returns
B)
on the assets.
Normal distribution returns are used for asset pricing models because they will only
C)
allow the asset price to fall to zero.
Which of the following distributions is most likely a discrete distribution?
A) A univariate distribution.
B) A normal distribution.
C) A binomial distribution.

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Question #1 of 96 Question ID: 1456450

Question #2 of 96 Question ID: 1456430

Which of the following statements about probability distributions is least accurate?

A probability distribution includes a listing of all the possible outcomes of an

Question #3 of 96 Question ID: 1456493

Portfolio Expected Return (%) Standard Deviation (%)

Question #4 of 96 Question ID: 1456515

A) Student’s t-distribution with 18 degrees of freedom.

Question #5 of 96 Question ID: 1456453

Question #6 of 96 Question ID: 1456465

Multivariate distributions can describe:

A) discrete random variables only.

Question #7 of 96 Question ID: 1456520

A) Outcomes of a simulation can only be as accurate as the inputs to the model.

Question #8 of 96 Question ID: 1456477

A) 68% confidence interval.

Question #9 of 96 Question ID: 1456510

Question #10 of 96 Question ID: 1456438

Question #11 of 96 Question ID: 1456481

Question #12 of 96 Question ID: 1456506

Question #13 of 96 Question ID: 1456480

Question #15 of 96 Question ID: 1456458

In a normal distribution, the:

A) median equals the mode.

Question #16 of 96 Question ID: 1456451

Question #17 of 96 Question ID: 1456497

Portfolio Expected Return Standard Deviation

Question #18 of 96 Question ID: 1456460

Which of the following statements about a normal distribution is least accurate?

Question #19 of 96 Question ID: 1456489

Question #20 of 96 Question ID: 1456508

A) Its continuously compounded return.

Question #21 of 96 Question ID: 1456490

Question #22 of 96 Question ID: 1456486

P(Z ≤ z) = N(z) for z ≥ 0

Question #23 of 96 Question ID: 1456434

A) discrete random variable.

Which of the following is NOT an assumption of the binomial distribution?

A) Random variable X is discrete.

Question #25 of 96 Question ID: 1456467

In a multivariate normal distribution, a correlation tells the:

A) overall relationship between all the variables.

Question #26 of 96 Question ID: 1456435

Which of the following is least likely to be an example of a discrete random variable?

Question #27 of 96 Question ID: 1456468

A multivariate distribution is best defined as describing the behavior of:

A) a random variable with more than two possible outcomes.

A) The t-distribution is positively skewed.

Question #29 of 96 Question ID: 1456431

Which of the following statements about probability distributions is least accurate?

A) The skewness of a normal distribution is zero.

Question #30 of 96 Question ID: 1456483

1.8 0.9671 0.9678

1.9 0.9738 0.9744

2.0 0.9793 0.9798

2.1 0.9838 0.9842

Question #31 of 96 Question ID: 1456514

Segment of the table of critical values for Student's t-distribution:

Level of Significance for a One-Tailed Test

Level of Significance for a Two-Tailed Test