A Uniform Probability Distribution Is a Continuous Probability Distribution Where

question 23

Multiple Choice

A uniform probability distribution is a continuous probability distribution where the probability that the random variable assumes a value in any interval of equal length is _____.

• A) different for each interval
• B) the same for each interval
• C) either different or the same depending on the magnitude of the standard deviation
• D) None of the answers is correct.

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Definitions:

Interest Rates

The cost of borrowing money or the return on invested capital, expressed as a percentage rate over a period of time, typically one year.

Zero-Coupon Bond

A bond that does not pay periodic interest but is issued at a discount from its face value, and its return comes from the difference between the purchase price and the face value paid at maturity.

Investment Horizon

Investment Horizon denotes the period an investor expects to hold an investment before taking any return out of it.

Interest Rate Risk

The risk that the value of an investment will decrease due to a rise in interest rates, affecting especially interest-bearing assets like bonds.