A Normal Probability Distribution

question 44

Multiple Choice

A normal probability distribution

• A) is a continuous probability distribution.
• B) is a discrete probability distribution.
• C) can be either continuous or discrete.
• D) must have a standard deviation of 1.

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Definitions:

At-The-Money

At-The-Money describes an option where the strike price is identical to the current price of the underlying asset.

Put Option

A financial contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified time.

Stock Price

The cost of purchasing a share of a company, as traded on a stock exchange, which may fluctuate based on supply and demand dynamics.

Exercise Price

The price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset.