Provide an Example of a Variable That Is Normally Distributed

question 15

Essay

Provide an example of a variable that is normally distributed in the general population. Why is the normal curve so common in nature?

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Definitions:

Expected Return

The weighted average of all possible returns for an investment, based on the probabilities of each outcome.

Portfolio

A portfolio is a collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including closed-end funds and exchange traded funds (ETFs).

Covariance

A measure that indicates the extent to which two random variables change in tandem.

Expected Returns

The anticipated profit or loss from an investment over a specific period, often used to evaluate the attractiveness of a financial asset.