Probability Distributions

question 10

Multiple Choice

Probability distributions:

• A) are always discrete.
• B) are always continuous.
• C) can be either discrete or continuous.
• D) are always symmetric.

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Definitions:

Risk-to-reward Ratio

A measure used by investors to compare the expected returns of an investment to the amount of risk undertaken to capture these returns.

Constant

A fixed value that does not change in mathematical equations or in the context of specific calculations.

Security Market Line

A line that represents the relationship between the expected return of a market security and its risk, as measured by beta.

Market Rate

The market rate, often related to interest or exchange rates, is the prevailing rate determined by supply and demand dynamics in the open market.