Which of the Following Is True for an Exponential Distribution $\lambda$

question 188

Multiple Choice

Which of the following is true for an exponential distribution with parameter $\lambda$ ?

• A) \(\mu\)= 1/\(\lambda\)
• B) \(\sigma\) = 1/\(\lambda\)
• C) The Y-intercept of f(x)is \(\lambda\).
• D) All of these choices are true.

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Definitions:

Beta

A scale for determining the level of fluctuation or consistent risk in a security or portfolio compared with the overall market.

Risk Premium

The additional return an investor expects to receive for taking on additional risk compared to a risk-free asset.

Multifactor APT

A model that describes the return of a security or portfolio in relation to various risk factors and the expected return on the assets, extending the concepts of the Capital Asset Pricing Model (CAPM).

Expected Return

The average of all possible returns for an investment, weighted by the likelihood of each outcome, representing the mean of the probability distribution of returns.