The Distribution of Returns, Measured Over a Short Interval of Time

question 24

Multiple Choice

The distribution of returns, measured over a short interval of time, like daily returns, can be approximated by:

• A) Normal distribution
• B) Lognormal distribution
• C) Binomial distribution
• D) none of the above

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Definitions:

Apparent Authority

A type of authority perceived by a third party that an agent seems to have in relation to the principal, regardless of whether such authority has been actually granted.

Principal

The primary party to a transaction, agreement, or contract, or the amount of money on which interest is paid or received.

Manifestations

Expressions or signs that something, especially a disease or a condition, is present.

Third Party

An individual or group besides the two primarily involved in a situation or transaction, often providing additional services or acting as an intermediary.